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Asia: Stocks head for third weekly drop in broad market selloff
[SINGAPORE] Asian stocks followed US shares lower, with the benchmark index headed for a third weekly decline, as consumer-discretionary and material shares led losses in a broad regional selloff.
The MSCI Asia Pacific Index fell 1.1 per cent to 124.99 as of 9:05 am in Tokyo, with all 10 industry groups dropping, as the measure headed for a 1.1 per cent loss this week.
An element of anxiety has returned to financial markets, with the yen gaining past 109 per US dollar, minutes from the Fed's March meeting emphasizing concern over the global economy and International Monetary Fund chief Christine Lagarde signaling the organization is likely to lower its outlook for world growth.
"We're definitely moving to a risk-off scenario and there's been a strong flight to safety," Niv Dagan, executive director at Peak Asset Management LLC in Melbourne, said by phone.
"Investors are cautious and are extremely nervous that global central bank intervention won't actually stimulate growth in the economy."
Japan's Topix index lost 1.5 per cent as energy explorers and iron and steelmakers led the decline.
South Korea's Kospi index fell 0.7 per cent.
Australia's S&P/ASX 200 Index slid 0.8 per cent. New Zealand's S&P/NZX 50 Index retreated 0.4 per cent. Markets in China and Hong Kong have yet to start trading.
The regional benchmark measure has dropped 5.7 per cent this year after a turbulent first quarter as investors assessed the slowdown in China, declines and then a recovery in oil and concerns about global banks that were exacerbated by fears that negative-interest rate policies would hurt their earnings.
The Standard & Poor's 500 Index is broadly flat for the year while a measure of European shares has lost 10 per cent.
West Texas Intermediate crude climbed as much as 1.2 per cent in early Friday trading, mostly erasing Thursday's decline, amid speculation about whether an accord can be reached at a meeting between Opec members and Russia on freezing oil production.
Futures on Hong Kong's Hang Seng Index fell 0.7 per cent in most recent trading, as did contracts on the FTSE China A50 Index. The Shanghai Composite Index fell 1.4 per cent on Thursday, the most since March 24, dragged down by banks and insurers.
E-mini futures on S&P 500 lost 0.1 per cent on Friday. The underlying US equity benchmark index dropped 1.2 per cent on Thursday, the most since Feb 23, as a measure of volatility had its biggest increase since January.