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Asian Stocks Fall On Europe Woes


Asian stocks fell across the board on Tuesday, mirroring steep declines on Wall Street and in Europe overnight amid worries about the political outlook for Spain and Italy. Concerns over Europe's debt problems have eased, but apprehensions about the outcome of the forthcoming elections in Italy and a growing corruption scandal in Spain brought Europe's woes back in focus.

Former Italian Prime Minister Silvio Berlusconi, running second in opinion polls, has promised a fresh round of tax cuts if his party wins election in the next three weeks, threatening the reforms put in place by the outgoing technocrat government.

Meanwhile, Spanish Prime Minister Mariano Rajoy rejected corruption charges leveled against him as well as several other members of his party and stressed that his government continues to be "stable" due to the Popular Party's majority in the parliament.

Tokyo stocks snapped a five-session winning streak, with exporters leading the decliners as persisting Europe's problems bought a respite to the yen's recent weakening trend. The Nikkei average lost 1.9 percent in heavy trading, while the broader Topix index shed 1.7 percent. Honda Motor retreated 2.4 percent and Advantest tumbled 3.2 percent.

Insurers and real estate firms fell on profit taking following sharp gains in recent weeks. Dai-ichi Life Insurance fell 3 percent and Mitsubishi Estate slumped 6 percent. Heavyweight Fast Retailing lost 3.2 percent as it reported a 5.5 percent fall in same-store sales at its Uniqlo clothing chain for January. Hitachi plunged 6.4 percent after it cut its profit forecast for 2013. Japan Airlines rallied 5.1 percent after raising full-year profit forecast.

China's Shanghai Composite index bucked the regional downward trend to end 0.2 percent higher, extending gains for the seventh straight session. Property developers led the gainers after China Vanke, the nation's largest property developer by market value, said its sales rose 56 percent from a year ago to 19.1 billion yuan in January. Meanwhile, the growth in China's services sector hit a four-month high in January, a private survey showed. HSBC's China services purchasing managers index rose to 54.0 in the month from 51.7 in December.

Hong Kong's Hang Seng index fell 2.3 percent, mirroring weak global cues on concerns over political instability in Spain and Italy.

Australian shares ended lower for a second straight session, as weak U.S. data and fresh Eurozone political tensions sapped appetite for riskier assets. Both the S&P/ASX 200 and the broader All Ordinaries index fell about half a percent each, with signs of improving economic activity in China helping limit the downside.

Banks ended off their day's lows after the Reserve Bank of Australia held rates steady at a record low of 3 percent, but left the door open for further easing if warranted to support the domestic economy against downside risks associated with the global economy.

Meanwhile, economic reports released today showed that the country's trade deficit narrowed more-than-expected in December and fourth quarter, while the house price index in 8 state capitals rose 1.6 percent in the December quarter. Commonwealth and NAB ended down 0.6 percent and 0.9 percent, respectively, and Westpac ended little changed, while ANZ rose 0.3 percent. Global miner BHP Billiton fell 1.7 percent, while rivals Rio Tinto and Fortescue lost about a percent each.

Seoul shares fell for a fourth consecutive session, as renewed worries over Europe and rising concerns over North Korea's nuclear test dented investor sentiment. The Kospi average finished 0.8 percent lower, with banks and builders struggling amid a sluggish housing market. Shinhan Financial Group and Daewoo Engineering & Construction fell about 3 percent each. Heavyweight Samsung Electronics edged down 0.1 percent, chip-maker SK Hynix fell 2.5 percent and shipbuilder Samsung Heavy Industries lost 2.3 percent.

New Zealand shares fell notably, weighed down by weak global cues and as investors awaited cues from the forthcoming earnings season. The benchmark NZX-50 index lost 0.8 percent, dragged down by heavyweights Contact Energy, Fletcher Building and Telecom, which fell 1-3 percent.

Rural services firm PGG Wrightson retreated 2.2 percent on profit taking following the previous session's rally and outdoor equipment retailer Kathmandu Holdings declined 1.3 percent, while units of Fonterra Shareholders' Fund rose 0.6 percent ahead of the GlobalDairyTrade auction tonight. Trade Me, Nuplex, Skellerup and SkyCity Entertainment rose between half a percent and 1.3 percent.

Elsewhere, Malaysia's KLSE Composite index was little changed, while benchmark indexes in India, Indonesia, Singapore and Taiwan were down between 0.3 percent and 0.8 percent.

U.S. stocks fell sharply overnight, as uncertainty over the political situation in Europe and a disappointing report on factory orders prompted investors to cash in on recent gains, which lifted the Dow and the S&P 500 to five-year closing highs. The Dow slid 0.9 percent, the S&P 500 declined 1.2 percent and the tech-heavy Nasdaq fell 1.5 percent.

by RTTNews Staff Writer

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