Asian stocks tumbled on Thursday, with investor sentiment hurt by Fed Chairman Bernanke's comments signaling the end of bond buying by the middle of next year and concerns over slowing growth in China.
Speaking at a news conference after a two-day Fed policy meeting, Bernanke yesterday indicated that the Fed is moving closer to slowing its bond-buying program later this year as long as incoming data remains broadly consistent with the Fed's forecasts. He expressed optimism about the economic outlook and hinted at ending bond purchases altogether around mid-2014. Bernanke's remarks were more explicit than markets had expected.
Meanwhile, China's manufacturing activity contracted at a faster pace in June, reducing the prospects of a promising economic recovery, preliminary results of a survey by Markit Economics and HSBC revealed. The flash manufacturing purchasing managers' index fell to a nine-month low of 48.3 in June from 49.2 in May. The survey showed that new export orders weakened further in the month.
Tokyo stocks fell sharply, defying a weaker yen which fell against both the dollar and euro. The Nikkei average fell 230 points or 1.7 percent to 13,015, while the broader Topix index shed 1.3 percent. China-related shares like Komatsu and Hitachi Construction Machinery dropped 4-5 percent on fresh fears about Chinese demand. Realty firms Sumitomo Realty & Development lost 3.3 percent and Tokyo Tatemono slumped almost 6 percent, tracking rising yields on Japanese government bonds.
GS Yuasa soared 5.9 percent on a Nikkei report that it would form an alliance with German autoparts giant Robert Bosch GmbH and Mitsubishi Corp. to develop the next generation of high-performance lithium-ion batteries.
In economic news, a leading indicator of the Japanese economy recorded slower growth in April than initially estimated, final data released by the Cabinet Office showed. The leading economic index rose to 99 in April compared with an initial estimate of 99.3.The coincident economic index, which measures the current economic situation, moved up to 95.3 in the month from 94.6 in March, while the lagging index, a measure of the past performance of the economy, dropped to 87.9 from 88 in March.
China's Shanghai Composite index slumped 2.8 percent to hit a fresh a six-month low on growth worries and as Moody's Investors Service warned that Chinese banks faced risks from rising local government debt. Hong Kong's Hang Seng index fell 2.9 percent to its lowest level in nine months.
Australian shares fell sharply, with banks leading the declines. The benchmark S&P/ASX 200 fell 103 points or 2.1 percent to 4,758, posting its largest single-day loss in four months. Australia and New Zealand Banking Group lost 2.5 percent on reports it is considering eliminating up to 590 jobs in its call centers in Australia. NAB shares declined 2.8 percent, Commonwealth Bank of Australia retreated 3.1 percent and Westpac tumbled 3.7 percent.
Global miners BHP Billiton and Rio Tinto as well as gold miner Newcrest fell about 3 percent each. Fortescue Metals Group plummeted 6.6 percent after the company announced it will miss its iron ore production target for the 2013 financial year. Intrepid Mines lost 6.5 percent after its shareholders backed their board to make efforts to recover the rights over a $5 billion copper and gold mine in Indonesia.
South Korea's Kospi average dropped 2 percent to a 10-month low on concerns the Fed would taper its stimulus measures sooner than expected. The local currency hit an 11-month low spooked by Bernanke's remarks. Foreign funds offloaded stocks worth a net 457.9 billion won, extending their selling spree for a 10th consecutive session, data showed.
New Zealand shares joined a regional selloff, weighed down by stimulus worries and concerns about slowing growth in the world's second-largest economy. Weak GDP data domestically accentuated investor concerns about slowing global growth. The benchmark NZX-50 index fell 47 points or 1.1 percent to 4,399. Network operator Chorus fell 5.2 percent on regulatory concerns, while Diligent Board Member Services tumbled 5.3 percent after admitting mistakes in recognizing revenue from new customer agreements and upgrades.
Shares of OceanaGold, the operator of the Macraes gold field, plunged over 12 percent as gold prices fell to a one-month low. Exporter Fisher & Paykel Healthcare rose 2.4 percent, bolstered by a weaker kiwi dollar. New Zealand's gross domestic product expanded 0.3 percent in the first quarter of 2013 compared to the previous three months, with the Canterbury rebuild boosting activity for construction and related services, Statistics New Zealand said. That was shy of forecasts for an increase of 0.5 percent following the 1.5 percent gain in the fourth quarter of 2012.
Elsewhere, India's Sensex was down 2.5 percent, Indonesia's Jakarta Composite index was losing a whopping 3.7 percent, Malaysia's KLSE Composite edged down 0.6 percent, Singapore's Straits Times was moving down 2.4 percent and the Taiwan Weighted average lost 1.4 percent.
U.S. stocks fell sharply overnight after Bernanke hinted at slowing stimulus measures, saying that downside risks to the outlook for the economy have diminished since the fall. The Dow and S&P 500 fell about 1.4 percent each, while the tech-heavy Nasdaq slid 1.1 percent.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.