Asia stocks tumble on Fed QE doubts; Nikkei drops 1.4%

Investing.com - Asian stock markets came under heavy selling pressure on Thursday, after minutes from the Federal Reserve’s most recent policy-setting meeting showed the central bank is considering ending its bond-buying program sooner-than-expected.

During late Asian trade, Hong Kong's Hang Seng Index plunged 1.8%, Australia’s ASX/200 Index settled 2.3% lower, while Japan’s Nikkei 225 Index ended down 1.4%.

The minutes of the Fed’s January meeting showed that policymakers discussed the slowing or stopping of bond purchases even before the job market improves, amid concerns that the policy could cause instability in financial markets.

In Tokyo, the Nikkei came off the previous session’s 52-month closing high, as investors remained cautious ahead of the upcoming announcement of the next governor of the Bank of Japan.

Market players said they expect an announcement after Prime Minister Shinzo Abe meets President Barack Obama on February 22 in Washington DC.

Shares in commodity producers sold off, tracking gold and copper prices lower. Sumitomo Metal Mining plunged 5.5%, Pacific Metals Company lost 3.75%, while copper producer JFE Holdings tumbled 4.4%.

A 2.2% decline in index heavyweight Fanuc also weighed after U.S. counterpart Caterpillar reported a 4% drop in mining- and construction-equipment sales over three months.

Meanwhile, in Hong Kong, the Hang Seng came under heavy selling pressure amid indications policy makers in Beijing will start tightening monetary policy to curb surging home prices.

On Tuesday, the Chinese central bank drained liquidity from the money markets for the first time since June and China’s banking regulator announced stricter rules for lending to local governments.

The China banking sector were among the biggest drags on the index, with China Construction Bank shares dropping 2.6%, Industrial and Commercial Bank of China falling 2.3% and Bank of China declining 2.7%.

In earnings news, footwear major Belle International Holdings saw shares plummet 16.7% after announcing it will post only a small increase in 2012 net profit.

Elsewhere, Australia, the benchmark ASX/200 Index dropped from the Wednesday four-and-a-half year high as weak earnings dampened sentiment.

Oil and gas extractor and electricity provider Origin Energy saw shares tumble 8.5% after the firm posted a larger-than-expected 34% drop in first-half profit and cut its annual earnings guidance.

Global miners also contributed to losses, with BHP Billiton and Rio Tinto losing 3.8% and 3% respectively, while gold miner Newcrest Mining dropped 3.6%.

Looking ahead, European stock market futures pointed to a lower open, after the minutes of the Federal Reserve’s most recent meeting indicated that the bank may wind down its bond-buying program sooner than expected.

The EURO STOXX 50 futures pointed to a loss of 0.4% at the open, France’s CAC 40 futures shed 0.25%, London’s FTSE 100 futures eased down 0.25%, while Germany's DAX futures pointed to a loss of 0.2%.

Investors were looking ahead to manufacturing and service sector data out of the euro zone later in the session as worries over the outlook for the economic recovery in the region lingered.