RTTN: Asian Stocks Decline After China's Rate Hike
(RTTNews) - Most Asian stocks declined on Wednesday, as investors fretted about China's surprise interest rate hike, the Bank of Canada's warning of a slowing economy and the foreclosure process at several large U.S. banks. However, crude futures rose modestly after tumbling $3.59 or 4.3% on the New York Mercantile Exchange overnight and gold price bounced back, as the dollar eased against the yen and the euro.
Japanese stocks fell sharply, dragging the Nikkei 225 average down by about 160 points or 1.65% to 9,382, a two-week closing low, as investors pulled money out of stocks following China's rate hike and the mortgage worries in the U.S. ahead of the G-20 Summit in November. The broader Topix lost 1.2% to close at 824.
Commodities trader Mitsubishi Corp fell 2.44%, gold producer Sumitomo Metal Mining declined 3.61%, automaker Toyota Motor Corp eased 1.3%, oil and gas explorer Inpex Corp tumbled 3.36% and Canon, the world's biggest camera maker, gave off nearly 2%.
The recent appreciation in the yen is a major negative for Japan's economy and there is a risk that the strong yen may prolong Japanese deflation, Bank of Japan Deputy Governor Kiyohiko Nishimura said on Wednesday.
South Korean stocks finished higher, ending a two-day losing streak, aided by strong buying in auto and metal stocks. The benchmark KOSPI closed up 13 points or 0.71% at 1,870. The local currency rose against the U.S. dollar.
Computer-memory chipmaker Hynix Semiconductor rallied 4.6% on a brokerage upgrade, heavyweight Samsung Industries added 0.54% and LG Electronics gained 1.5% following recent declines. In the auto space, Hyundai Motor advanced 3.23% and Kia Motors rose 1.69%, buoyed by the companies's brighter earnings outlook.
Financial stocks such as KB Financial and Hana Financial rose about 2% each as investors speculated that China's surprise rate hike would add more pressure on the Bank of Korea to raise interest rates.
The Australian market hit a two-week low, with materials and energy stocks leading the declines, after Wall Street posted its biggest loss in two months overnight and China's first interest rate hike in nearly three years stoked concerns that global economic growth will slow.
The benchmark S&P/ASX200 ended down 0.66% at 4,625 and the broader All Ordinaries fell by 0.69% to 4,694. Shares in television broadcaster Ten Network soared 9.57% on reports that billionaire James Packer is buying the company's shares.
Telstra eased 0.75% after the Federal Government reintroduced a bill which will force the telephone company to split its business into separate retail and wholesale operations. In the resources sector, big miner Rio Tinto, which has unveiled a $US3.1 billion investment plan to expand its Pilbara operations, declined 1.68%, its rival BHP Billiton shed 0.68% despite reporting strong production figures for September and Fortescue Metals Group lost 2.52%.
