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Asian Shares Fall As Risk Appetite Fades

4/4/2012 5:07 AM ET

Asian stock markets followed Wall Street to end broadly lower on Wednesday after the U.S. Federal Reserve voiced concern about the pace of job growth, but appeared to refrain from announcing more monetary stimulus to prop up the world's largest economy.

The minutes from Fed's March meeting revealed that only two of 10 voting committee members on the Fed committee saw the case for further monetary stimulus, if the economy weakened. This contrasts with the discussion in the minutes of the January meeting in which "a few members" believed that conditions could warrant additional securities purchases.

Trading volumes remained thin before the Easter holiday, as investors awaited an interest rate announcement by the European Central Bank later in the global day and Friday's jobs report in the U.S. for direction. Markets in China, Hong Kong and Taiwan were closed for holidays

Commodities fell almost across the board, adding to their overnight steep losses, while the dollar rose to its highest level in two weeks against the euro.

Tokyo stocks tumbled, with the Nikkei average falling 2.3 percent below 10,000 to a one-month low, as concerns over structural problems in the peripheral EU countries and signs of little fresh stimulus to the U.S. economy heightened risk aversion. The broader Topix index shed 1.8 percent. Heavyweight Fast Retailing plunged 5.7 percent despite some positive news that its same-store sales at Uniqlo casual clothing rose 5.1 percent in March.

Fanuc, Nippon Steel and Hitachi Construction Machinery fell 2-3 percent as profit taking emerged following recent sharp gains from January through March. Japan Tobacco bucked the downward trend to end 1.3 percent higher on defensive buying. Asahi Group Holdings added 2 percent following an announcement that it abandoned plans to buy Czech brewer StarBev.

Australian shares eased slightly as weakness in the resource sector outweighed gains among financial stocks. Paring early losses, both the benchmark S&P/ASX 200 and the broader All Ordinaries index finished down about 0.1 percent each.

Rio Tinto, Fortescue and BHP Billiton fell between 0.6 percent and 1.3 percent, as commodities retreated overnight and data showed Australia unexpectedly swung to a trade deficit for a second straight month in February, missing expectations for a $1.1 billion surplus. Gold miner Newcrest fell 2.4 percent after gold sank over 2 percent overnight on disappointment over the Fed's toned down assessment of a possible need for further monetary stimulus.

Financials ended broadly higher, with Westpac up 1.4 percent and NAB gaining 0.7 percent, while ANZ closed flat and Commonwealth edged down 0.3 percent. QBE Insurance rallied 3.4 percent after the company said it has had a positive start to 2012 after an unprecedented number of natural disasters. Transfield Services slumped 11.7 percent after the construction and maintenance firm issued a profit downgrade.

South Korea's Kospi average dropped 1.5 percent, with high-beta construction stocks and shipbuilders pacing the declines, as hopes that the Fed would launch more asset-buying waned. Shipbuilders such as Hyundai Heavy, Samsung Heavy Industries and Daewoo Shipbuilding fell 2-5 percent, while builder Hyundai Engineering & Construction fell 2.8 percent, Doosan Heavy Industries & Construction lost 2.1 percent and Samsung Engineering slumped 5.3 percent. SK Telecom tumbled 3.2 percent after steelmaker POSCO sold about 2.3 million shares of the company at a discount to Tuesday's closing price.

New Zealand shares rose for the first time in three sessions after Pumpkin Patch announced a new deal with leading global online retailer Amazon. Shares of the children's clothing chain soared 9.8 percent after the company said it has entered an agreement with Amazon to sell its products online in the U.K., France and Germany. The benchmark NZX-50 index rose 0.2 percent.

Carpet maker Cavalier, would-be bank Heartland and jeweler Michael Hill International climbed around 4 percent each, while shares of Fletcher Building, the nation's largest construction company, tumbled 3.6 percent in the wake of weak Australian building approvals figures released earlier this week.

Elsewhere, India's Sensex was last trading down 0.8 percent, Indonesia's Jakarta Composite index fell 1.9 percent, Malaysia's KLSE Composite shed half a percent and Singapore's Straits Times was down 0.9 percent.

On Wall Street, stocks lost ground on Tuesday, with selling accelerating in the afternoon session after the Federal Reserve released the minutes of its latest monetary policy meeting. The Dow ended down half a percent, the tech-heavy Nasdaq slipped 0.2 percent and the S&P 500 slid 0.4 percent.

by RTT Staff Writer

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