Asian stocks fell across the board on Thursday after further falls in oil prices to fresh five-year lows triggered the biggest loss for U.S. stocks since October yesterday. Chinese shares fell on profit taking after recent gains, a stronger yen weighed on the Japanese market and Seoul shares tumbled in the aftermath of the central bank’s decision to hold interest rates at a record low of 2 percent.
Chinese shares ended in the red amid concerns the recent rally was overdone. The benchmark Shanghai Composite index swung between gains and losses before finishing down 0.49 percent at 2,925.74, dragged down by oil producers and brokerage companies following media reports that the regulator had set up a team to check brokers’ margin business.
Hong Kong’s Hang Seng index dropped 0.90 percent to finish at 23,312.54 ahead of Chinese lending and retail sales data due out tomorrow.
Japanese shares extended losses for the third day, as weak cues from offshore markets and disappointing machinery orders data dampened investors’ risk appetite. The benchmark Nikkei average fell 0.89 percent to 17,257.40, a two-week low, while the broader Topix index eased 0.7 percent.
Japan’s core machinery orders, a leading indicator of capital spending, fell for the first time in five months in October, data released by the Cabinet office showed. Orders fell 6.4 percent to 778.0 billion yen from the prior month. Another report showed that an index measuring territory industry activity fell a seasonally adjusted 0.2 percent in October.
Exporter shares fell broadly on the back of a stronger yen. Toyota Motor, Sony, Honda Motor and Panasonic declined between 0.6 percent and 1.8 percent. Skymark Airlines soared 12.6 percent, extending Wednesday’s rally, on a report the struggling budget carrier is seeking funds by selling shares to an investment fund.
Australian shares regained some lost ground to finish off their day’s lows, as oil prices rebounded in Asian deals and investors digested a mixed jobs report. The benchmark S&P/ASX 200 index fell more than a percent earlier in the session before recouping some of its loss to end down 0.53 percent at 5,231, marking its third consecutive session of declines.
Australia’s unemployment rate rose slightly to 6.3 percent in November, although the economy created 42,700 jobs during the month, well above forecasts for 15,000 after a gain of 24,100 jobs in the previous month, official data showed. Separately, consumer expectations for the pace of consumer inflation fell to 3.4 percent in December from 4.1 percent in November, a survey from the Melbourne Institute showed.
Energy stocks were hit hard, with Santos plunging 8.3 percent after the company said it plans to cut $700 million in planned spending in the wake of falling oil prices. Woodside Petroleum lost 2 percent, Oil Search tumbled 2.9 percent and Origin Energy fell 2.1 percent. Caltex Australia bucked the downward trend to close 2.9 percent higher after it flagged an up to 40 percent rise in its full year profit.
Mining giant BHP Billiton slid 1.3 percent, Rio Tinto retreated 2.4 percent and Fortescue Metals Group slumped 3.5 percent. In the banking sector, Commonwealth, ANZ, NAB and Westpac fell between 0.2 percent and 0.9 percent. Defensive stocks gained ground, with telecom giant Telstra gaining 1.3 percent and retailer Woolworths rising 0.4 percent.
Seoul shares fell sharply for a second straight session, joining a global sell-off. The benchmark Kospi average dropped 1.49 percent to 1,916.59, dragged down by energy stocks, tracking overnight falls in their U.S. peers after the Organization of the Petroleum Exporting Countries (OPEC) cut the forecast for crude oil demand in 2015 to the lowest in 12 years, citing weaker growth in consumption and the U.S. shale boom.
Meanwhile, the Bank of Korea kept interest rates unchanged at 2.00 percent for the second straight month, waiting to gauge the impact of two rate cuts earlier this year on Asia’s fourth-largest economy. Governor Lee Ju-yeol flagged downward revisions to forecasts for inflation and economic growth, raising expectations of an interest rate cut in the first quarter of 2015.
New Zealand shares ended firmly in the red and the NZ dollar strengthened against other major currencies after the country’s central bank held its official cash rate steady at 3.50 percent, in line with expectations, and signaled its explicit tightening bias. Governor Graeme Wheeler repeated his warning that the currency remained “unjustifiably and unsustainably high” and that the central bank expects “a further significant depreciation.” The benchmark NZX-50 index dropped 0.39 percent to 5,502.07.
Elsewhere, India’s Sensex was moving down 0.4 percent, Indonesian shares were marginally lower, Malaysia’s KLSE Composite index was losing 1.2 percent, Singapore’s Straits Times was down 0.1 percent and the Taiwan Weighted average slipped 0.2 percent.
Malaysia’s Industrial output grew an annual 5 percent in October, compared with forecasts for a 4.2 percent increase and down from the 5.4 percent rise seen in the previous month, official data showed.
U.S. stocks tumbled overnight as a pullback in energy stocks sparked a sell-off across the board. The sell-off in oil companies came after a report showed a surprise jump in oil inventories last week and oil cartel OPEC said it expects demand for crude next year to be the lowest since 2003. The Dow tumbled 1.5 percent and the S&P 500 plummeted 1.6 percent to one-month lows, while the tech-heavy Nasdaq dropped 1.7 percent.
