Asian stocks fell again Tuesday after weaker Chinese manufacturing and a cut in Europe’s growth outlook fueled fears about the global economy.
KEEPING SCORE: Sydney’s S&P/ASX 200 fell 1 percent to 5,300.10 and Hong Kong’s Hang Seng index lost 1 percent to 20,469.62. Seoul’s Kospi shed 0.6 percent to 1,973.88 and India’s Sensex retreated 0.3 percent to 25,163.72. The Shanghai Composite Index declined 0.2 percent to 2,986.19 and benchmarks in New Zealand, Singapore, Taiwan and Indonesia also fell. Japanese markets were closed for a holiday. On Wall Street overnight, the Dow Jones industrial average lost 0.8 percent and the Standard & Poor’s 500 index lost 0.9 percent. The Nasdaq composite shed 1.1 percent.
GLOBAL GROWTH: Weaker manufacturing in China and a cut in the eurozone’s growth forecast fueled concern about the global outlook. The latest data, combined with the Australian central bank’s decision to cut interest rates, “challenged expectations of growth recovery,” said Citigroup in a report.
ANALYST’S TAKE: “The wind in the sails of a global stock rally seems to have lessened lately,” said Bernard Aw of IG in a report. “Technical traders might say that some correction is necessary for the rally to continue, but I feel that the underlying factors are beginning to turn its tail.”
CHINA: A survey of manufacturers found activity weakened in April despite government efforts to stimulate the slowing economy. A prolonged slowdown could hurt prices of commodities for which Chinese factories are major customers and the economies that supply them. Worries about China were largely responsible for a bout of turmoil in global financial markets early this year.
WEAKER EUROPE: European officials trimmed their economic growth forecasts for the 19 countries that share the euro currency, citing an unpredictable global outlook marked by political uncertainty and weakness in emerging markets. The European Union forecast the eurozone economy would grow by 1.6 percent this year, down by 0.1 points from its expectations made three months ago. European Union Commissioner Pierre Moscovici said the recovery “remains uneven.”
ENERGY: Benchmark U.S. crude added 8 cents to $43.73 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $1.13 on Tuesday to close at $43.65. Brent crude, used to price international oils, was unchanged at $44.97 in London. It tumbled 86 cents on Tuesday to $44.97.
CURRENCY: The dollar gained to 107.16 yen from Tuesday’s 106.68 yen. The euro edged down to $1.1488 from $1.1499.