Asian stocks fell sharply on Thursday, with the region's benchmark index declining about 1.7 percent, as a sell-off in U.S. stocks overnight amid grim economic data and falling oil and metal prices sparked worries over the outlook for global growth this year. Adding to the woes, Moody's downgraded Greece's local and foreign currency bond ratings deeper into junk status, heightening concerns over Europe's debt crisis.
Wall Street suffered its worst session since August Wednesday, with the major averages ending down over 2 percent each, as downbeat reports on private-sector job growth and the manufacturing sector and news of major automakers reporting weak U.S. vehicle sales for May suggested the economic recovery is running out of steam.
Data out of the U.S. showed manufacturing activity in May expanded at the weakest pace in more than a year and employers hired fewer workers than forecast, fueling concerns over the outlook for the global economy.
The Japanese market tumbled, as investors largely stayed on the sidelines ahead of a crucial vote on no-confidence motion against Prime Minister Naoto Kan in parliament. The benchmark Nikkei average fell 1.7 percent, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange closed down 1.6 percent.
Automakers closed mostly lower after reporting dismal U.S. sales for May, with Toyota Motor leading the declines. Shares in Tokyo Electric Power, the operator of the Fukushima Daiichi nuclear power plant , ended up 2 percent after hitting a record low of 282 yen on expectations that a Tepco support scheme will be formed.
Meanwhile, Prime Minister Naoto Kan survived the no-confidence vote after appealing to ruling party dissidents by offering to step down after containing the country's worst crisis since World War II.
China's Shanghai Composite closed down 1.4 percent at a four-month low, as continued uncertainty over government's monetary policy in the second half caused a sell-off in property stocks. China Vanke and Poly Real Estate Group were among the prominent decliners. Automakers also fell sharply on a report that China's passenger car sales fell last month. Hong Kong's Hang Seng fell 1.6 percent, with financial and energy stocks leading the declines.
Australia's benchmark S&P-ASX 200 index slumped 2.3 percent, its largest one-day percentage fall in a year, after more signs of economic slowdown and lingering debt problems in Europe sent commodity prices tumbling. Domestic data showing a surprise 1.1 percent increase in April retail sales failed to lift sentiment as investors bet the central bank will raise interest rates as early as July. The broader All Ordinaries index closed down 2.2 percent.
BHP Billton, the world's largest mining company, fell 2.2 percent, rival Rio Tinto declined 1.8 percent and Fortescue tumbled 3.4 percent. Among banks, ANZ lost 2.6 percent, Westpac fell 2.3 percent and Commonwealth eased 1.9 percent. NAB slumped 6.3 percent on going ex-dividend. Qantas fell a percent after reporting a modest 7 percent rise in passenger traffic for April. Wesfarmers lost 1.6 percent after the retail-to-coal conglomerate downgraded sales guidance.
South Korea's Kospi average lost 1.3 percent spooked by fears of the slowing economic growth. The local currency fell against the U.S. dollar. Samsung Electronics led the declines in technology shares, losing a little over three percent while LG Electronics tumbled 4.4 percent. Steelmaker Posco shed 0.8 percent and Hyundai Motor, the nation's largest automaker, edged down 0.6 percent despite posting strong U.S. sales for May.
New Zealand's benchmark NZX-50 shed 0.7 percent, with Goodman Fielder leading the decliners in the wake of its removal from the MSCI Australia Index. Shares of the food ingredient manufacturer tumbled 4.2 percent. APN News & Media, the publisher of the New Zealand Herald newspaper and operator of the Radio Network, fell 2.7 percent. Utility Contact Energy lost 1.5 percent after the utility said it raised $331.9 million as part of a renounceable rights issue to help fund the construction of the $623 million Te Mihi geothermal power station.
Rural services firm PGG Wrightson shed 1.9 percent, a day after the company said it agreed to sell its half stake in New Zealand Merino to partner Merino Grower Investments for $7.6 million. Financial services firm Pyne Gould climbed 2.5 percent to a six-month high after completing its distribution of shares in Heartland New Zealand to shareholders.
Elsewhere, India's Sensex was last trading down 0.7 percent, Singapore's Straits Times fell 0.4 percent and the Taiwan Weighted eased 0.8 percent, while Malaysia's KLSE edged up marginally. Crude futures were down 44 cents at $99.85 a barrel after a private inventory reports showed an unexpected jump in U.S. crude supplies.
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May 08, 2026 15:50 ET Manufacturing and services sector survey results and labor market data from main economies were the highlight on the economics news front this week. Factory orders and jobs report dominated the news flow in the U.S. Similarly, industrial production data from German garnered attention in Europe. In Asia, purchasing managers’ survey results from China and the central bank decision from Australia were in focus.