Investing.com - Asian stock markets tumbled on Thursday, tracking sharp overnight losses on Wall Street, as investor focus turned from U.S. President Barack Obama’s re-election to concerns over U.S. fiscal policy.
Market participants also focused on the start of the 18th Chinese Communist Party Congress, where a once-in-a-decade leadership change is to take place.
During late Asian trade, Hong Kong's Hang Seng Index plunged 2.4%, Australia’s ASX/200 Index fell 0.7%, while Japan’s Nikkei 225 Index tumbled 1.5%.
President Obama was declared as winner of the U.S. presidential election late Tuesday, defeating Republican challenger Mitt Romney.
Traders will now be turning their attention to how lawmakers will deal with the looming U.S. “fiscal cliff”, approximately USD600 billion in tax hikes and spending cuts due to come into effect on January 1.
Ratings agency Fitch warned late Wednesday that the U.S.’s triple-A rating would be at risk if Congress and the president did not immediately take action to avoid the crisis.
Fresh concerns over the euro zone’s economic health also emerged Wednesday, after data showed that German industrial production dropped 1.8% in September, compared to expectations for a 0.5% decline.
Adding to the gloom, the European Commission cut its growth forecast for the euro area, forecasting the 17-nation euro economy will grow by a meager 0.1% in 2013, down from a May estimate of 1%. It cut the forecast for Germany to 0.8% from 1.7%.
In Japan, shares in exporters came under heavy pressure as the yen strengthened against the U.S. dollar and the euro.
Automakers Honda and Nissan fell 3.45% and 1.15% respectively, while Sony tumbled 3%.
A stronger yen reduces the value of overseas income at Japanese companies when repatriated, dampening the outlook for export earnings.
The Nikkei came under further pressure after data showed core machinery orders dropped 4.3% in September, disappointing expectations for a 1.9% decline.
Shares in heavy machinery makers Komatsu and Hitachi construction Machinery retreated 2.15% and 2.5% respectively, while shares in industrial robot maker Fanuc lost 2.3%.
Meanwhile, shares in Hong Kong sold off, with a looming leadership change in China and fears over the U.S. fiscal cliff weighing on the market.
Oil firms came under pressure after oil prices plunged nearly 5% in New York on Wednesday, amid fears over the health of the global economy.
PetroChina shares fell 2.5%, CNOOC lost 2.4%, while Sinopec traded down 3%.
Elsewhere, shares in Australia managed to come off the lowest levels of the session after official data showed that the nation’s employers added 10,700 jobs in October, above expectations for an increase of 200.
Looking ahead, U.S. and European stock market futures pointed to a higher open, following the previous day’s route.
The EURO STOXX 50 futures pointed to a gain of 0.8% at the open, France’s CAC 40 futures added 0.6%, London’s FTSE 100 futures rose 0.5%, while Germany's DAX futures pointed to a rise of 0.5%.
Later in the day, the European Central Bank is to announce its benchmark interest rate. The announcement is to be followed by a press conference with ECB President Mario Draghi to discuss the monetary policy decision.
Also Thursday, the U.S. is to publish official data on the trade balance as well as the weekly government report on initial jobless claims.
Market participants also focused on the start of the 18th Chinese Communist Party Congress, where a once-in-a-decade leadership change is to take place.
During late Asian trade, Hong Kong's Hang Seng Index plunged 2.4%, Australia’s ASX/200 Index fell 0.7%, while Japan’s Nikkei 225 Index tumbled 1.5%.
President Obama was declared as winner of the U.S. presidential election late Tuesday, defeating Republican challenger Mitt Romney.
Traders will now be turning their attention to how lawmakers will deal with the looming U.S. “fiscal cliff”, approximately USD600 billion in tax hikes and spending cuts due to come into effect on January 1.
Ratings agency Fitch warned late Wednesday that the U.S.’s triple-A rating would be at risk if Congress and the president did not immediately take action to avoid the crisis.
Fresh concerns over the euro zone’s economic health also emerged Wednesday, after data showed that German industrial production dropped 1.8% in September, compared to expectations for a 0.5% decline.
Adding to the gloom, the European Commission cut its growth forecast for the euro area, forecasting the 17-nation euro economy will grow by a meager 0.1% in 2013, down from a May estimate of 1%. It cut the forecast for Germany to 0.8% from 1.7%.
In Japan, shares in exporters came under heavy pressure as the yen strengthened against the U.S. dollar and the euro.
Automakers Honda and Nissan fell 3.45% and 1.15% respectively, while Sony tumbled 3%.
A stronger yen reduces the value of overseas income at Japanese companies when repatriated, dampening the outlook for export earnings.
The Nikkei came under further pressure after data showed core machinery orders dropped 4.3% in September, disappointing expectations for a 1.9% decline.
Shares in heavy machinery makers Komatsu and Hitachi construction Machinery retreated 2.15% and 2.5% respectively, while shares in industrial robot maker Fanuc lost 2.3%.
Meanwhile, shares in Hong Kong sold off, with a looming leadership change in China and fears over the U.S. fiscal cliff weighing on the market.
Oil firms came under pressure after oil prices plunged nearly 5% in New York on Wednesday, amid fears over the health of the global economy.
PetroChina shares fell 2.5%, CNOOC lost 2.4%, while Sinopec traded down 3%.
Elsewhere, shares in Australia managed to come off the lowest levels of the session after official data showed that the nation’s employers added 10,700 jobs in October, above expectations for an increase of 200.
Looking ahead, U.S. and European stock market futures pointed to a higher open, following the previous day’s route.
The EURO STOXX 50 futures pointed to a gain of 0.8% at the open, France’s CAC 40 futures added 0.6%, London’s FTSE 100 futures rose 0.5%, while Germany's DAX futures pointed to a rise of 0.5%.
Later in the day, the European Central Bank is to announce its benchmark interest rate. The announcement is to be followed by a press conference with ECB President Mario Draghi to discuss the monetary policy decision.
Also Thursday, the U.S. is to publish official data on the trade balance as well as the weekly government report on initial jobless claims.