You are here

Asia: Stocks fall as equities in Hong Kong, Seoul join selloff


[SINGAPORE] Asian stocks fell as markets in Hong Kong and Seoul joined a global selloff in their first day of trading this week.

The MSCI Asia Pacific Excluding Japan Index dropped 1.2 per cent to 367.19 as of 9.35am in Hong Kong. Markets in mainland China, Japan, Taiwan and Vietnam are closed for holidays. The Hang Seng Index slumped 4.1 per cent in Hong Kong, while South Korea's Kospi index tumbled 2.5 per cent. A gauge of worldwide equities slid 2.3 per cent in the first three days of the week amid concern about the outlook for the global economy and as oil extended its slide.

"We're seeing a contagion from what's been going on in the last three days in global markets," Tim Condon, head of Asian research at ING Groep NV in Singapore, said by phone. "This is the first day South Korea and Hong Kong are registering a sort of reaction to that. It's a huge down day. Financial markets are repricing for a global growth slowdown. Expectations that monetary policy would be able to do much have diminished considerably."  

Federal Reserve Chair Janet Yellen on Wednesday highlighted uncertainty over the pace of China's growth and the related rout in commodities, concerns that have roiled financial markets throughout the year and twice pushed global shares to the brink of a bear market.

Ms Yellen told Congress the Fed still expects to raise rates gradually while making it clear that continued market turmoil may alter its forecasts. Her dovish-sounding comments weren't enough to boost US equities.

The Hang Seng China Enterprises Index of mainland shares listed in Hong Kong slumped 5.1 per cent on Thursday.

The Kospi index is trading for the first time since North Korea launched a long-range rocket on Feb 7. South Korea is pulling out of an industrial complex jointly run with North Korea, taking aim at their last remaining symbol of economic cooperation to punish leader Kim Jong Un for a recent nuclear test and rocket launch.

Australia's S&P/ASX 200 Index added 0.2 per cent, after falling into a bear market on Wednesday when it plunged to its lowest level since July 2013. New Zealand's S&P/NZX 50 Index lost 0.4 per cent, while Singapore's Straits Times Index slipped 1 per cent.

Markets in mainland China, Taiwan and Vietnam remain closed for the rest of the week, while those in Japan will resume trading on Friday.

E-mini futures on the Standard & Poor's 500 Index fell 0.7 per cent after the underlying US equity benchmark index closed down less than 0.1 per cent on Wednesday, with gains of as much 1.6 per cent evaporating in the final hour of trading.

Crude oil futures fell below US$27 a barrel on Thursday after after dropping 15 per cent the previous five sessions.