Asian markets down, spooked by IMF growth revision

Thursday, 11 October 2012 00:00 - - {{hitsCtrl.values.hits}}

HONG KONG (AFP): Asian markets fell for a second straight day Wednesday as investors reacted to losses on Wall Street after the IMF cut its global growth forecasts, predicting the slowest rate in three years.

Japanese shares were also hit by the strengthening yen, while selling was fuelled by news the country’s top car makers saw sales in China slump in September owing to a diplomatic spat between Tokyo and Beijing.

Tokyo tumbled 1.69 percent by the break, Hong Kong fell 0.47 percent, Shanghai was 0.26 percent lower, Sydney lost 0.38 percent and Seoul shed 1.06 percent.

The International Monetary Fund on Tuesday cut further its growth estimates for the world economy this year and next, citing the ongoing European debt crisis and stuttering growth in the US economy.

The latest Global World Outlook, which said Asia was being hit by a slowdown in China, also warned that conditions could even worsen if the eurozone problems were not dealt with.

It also followed a similar downward revision for Asia’s growth by the World Bank and Asian Development Bank.

“Markets have gone a bit too far and people are starting to get worried about the growth outlook,” Matthew Sherwood, head of investment market research at Perpetual in Sydney, said.

On Wall Street the Dow lost 0.81 percent, the S&P 500 slid 0.99 percent and the Nasdaq shed 1.52 percent, with sentiment also weighed by concerns over the upcoming corporate earnings season.

Global markets have enjoyed strong gains recently after the US, Japanese and European central banks unveiled monetary easing schemes to kickstart lending and jobs.

Japanese shares were hit again as the IMF report led dealers to buy the safe haven yen.

“Japan got its first ‘IMF shock’ Tuesday, but the fallout in the US market will serve as a ‘double whammy’,” said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities.

“Combined with the rise in the yen, stocks will be in full retreat,” Nishi told Dow Jones Newswires.

On currency markets the euro slipped to $1.2846 and 100.51 yen in early Asian trade from $1.2881 and 100.77 yen in New York late Tuesday. The dollar was flat at 78.23 yen.

Car giants Toyota, Nissan and Honda were hit by a dive in Chinese car sales as an islands row between China and Japan continues.

Toyota saw monthly sales in China, the world’s biggest car market, slump 48.9 percent year-on-year last moth, while Nissan tumbled 35.3 percent and Honda dropped 40.5 percent.

On Tokyo’s Nikkei index, Toyota Motor was down 1.8 percent and Honda Motor was 1.1 percent lower but Nissan Motor added 0.3 percent.

Oil prices were lower. New York’s main contract, light sweet crude for delivery in November fell 27 cents to $92.12 a barrel and Brent North Sea crude for November delivery shed 50 cents to $114.00.

Gold was at $1,763.77 at 0300 GMT compared with $1,772.30 on Wednesday.