Asian shares ended mostly lower in nervous trading on Thursday, as higher borrowing costs in Spain and Italy rekindled worries about spreading contagion in Europe.
Risk aversion deepened after the yields on 10-year Spanish sovereign debt rose to near 7 percent, or six-month highs, while Italian government yields broke the 6 percent danger level in the wake of disappointing auctions overnight. Investors also remained focused on Greece after a new opinion poll showed most Greeks want to see the terms of an international financial bailout revised.
Stocks pared losses across Asia as polls showed over 60 percent of Irish voters support fiscal measures to contain the debt crisis, while German retail sales increased for a second consecutive month in April. The euro recovered against the dollar and commodities such as copper and crude reclaimed some lost ground after data showed Germany's seasonally adjusted jobless rate fell to a record low in May.
Japan's Nikkei fell almost 2 percent early in the session before recouping some of its loss to end down about a percent lower at 8,542.73, its lowest closing mark since Jan. 17. The broader Topix index shed 0.6 percent. Export-linked shares came under heavy selling pressure, as the yen hit fresh multi-month highs against the euro and dollar on concerns about the stability of Europe's financial system.
Advantest tumbled 3.7 percent, Canon fell 3.5 percent, Honda Motor lost 2.4 percent and Toyota Motors edged down 1.1 percent. Nikon rose 1.1 percent on hopes for growth in its camera business, especially its highly profitable digital single-lens reflex cameras.
China's Shanghai Composite index eased half a percent, with infrastructure-related stocks leading the losses on concerns over slowing domestic growth. Hong Kong's Hang Seng index slipped a modest 0.3 percent.
Australian stocks pared early losses to end modestly lower, with month-end window dressing and expectations that China will take more steps to boost economic growth this year helping prevent significant downside. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index lost about 0.4 percent each.
Mining stocks fell notably, with BHP Billiton and Rio Tinto falling less than a percent each, while smaller rival Fortescue slumped 4.4 percent. In the financial sector, ANZ, Commonwealth and Westpac fell between 0.3 percent and 0.7 percent, while NAB tumbled 5.6 percent on going ex-dividend.
In economic news, Australian building approvals plummeted a seasonally adjusted 8.7 percent month-over-month in April, the Australian Bureau of Statistics said, coming in at 10,330. That was well shy of forecasts for an increase of 0.3 percent following the downwardly revised gain of 6.0 percent. The annual figures were even worse, with approvals plummeting 24.1 percent.
Seoul shares ended largely unchanged, with the Kospi average slipping marginally on fears that Spain could be forced to seek a bailout. Crude refiners led the losses, as crude fell more than 3 percent to a 6-month low overnight, pressured by a stronger dollar and on concerns the deepening eurozone debt crisis will reduce fuel demand.
S-Oil lost a percent, while SK Innovation tumbled 2.8 percent. Ssangyong rallied 2.9 percent after its parent India's Mahindra & Mahindra posted a forecast-beating 44 percent rise in fourth-quarter profit.
New Zealand shares rose, defying weak overseas and regional cues, as Mainfreight extended the previous session's gains after posting record annual sales and earnings. Shares of the transport company gained a percent, adding to yesterday's 3.2 percent rally, while the benchmark NZX-50 index rose a modest 0.2 percent. Pumpkin Patch, the children's clothing chain, advanced 2.3 percent after announcing two new board appointments.
Among heavyweights, Contact Energy rose 1.5 percent, Skycity Entertainment gained 1.2 percent and Telecom added 1.2 percent, while Nuplex tumbled nearly 4 percent and Fisher & Paykel Healthcare lost 3.3 percent. Rakon, a manufacturer of components for navigation systems and smart phones which derives most of its revenue from abroad, soared 8.5 percent on a weaker kiwi dollar. Oil refiner NZ Refining, led the decliners on the exchange, falling 3.7 percent as it reported lower gross refining margins in March and April.
India's benchmark Sensex was last trading down 1.1 percent after government data showed the nation's annual economic growth slumped to a nine-year low of 5.3 percent in the January-March quarter, reflecting weak business sentiment amid the weakness in the rupee, high fiscal and current account deficits and policy paralysis in Prime Minister Manmohan Singh's administration.
Elsewhere across Asia, Indonesia's Jakarta Composite index was down a whopping 2.2 percent and Singapore's Straits Times edged down 0.4 percent, while Malaysia's KLSE Composite rose 0.4 percent and the Taiwan Weighted average added 0.6 percent.
U.S. stocks tumbled overnight as surging bond yields raised concerns that debt-plagued Spain could be forced to seek a bailout. Adding to jitters, a report from the National Association of Realtors showed that U.S. pending home sales unexpectedly saw a notable decrease in April, with the headline index tumbling 5.5 percent to 95.5 in April after rising 3.8 percent in March.
The drop by the index surprised economists, who had expected pending home sales to edge up by 0.5 percent. The Dow slid 1.3 percent, the tech-heavy Nasdaq fell 1.2 percent and the S&P 500 lost 1.4 percent.
by RTT Staff Writer
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