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Asian Markets Decline On Global Growth Worries

Asian-Market-100912_20Sep15.jpg

Asian stock markets are in negative territory on Monday, tracking the weak cues from Wall Street and European markets Friday and on renewed worries about global economic growth following the U.S. Federal Reserve's decision to keep interest rates at a record low last week. In addition, a stronger U.S. dollar put downward pressure on commodity prices, dragging down resource stocks.

The Australian market opened sharply lower, after U.S. and European markets closed lower on Friday in a negative reaction to the Federal Reserve's decision to leave its key interest rates unchanged. Additionally, weak commodity prices weighed on resource stocks.

In late-morning trades, the benchmark S&P/ASX200 Index is declining 96.90 points or 1.87 percent to 5,073.60. The broader All Ordinaries Index is down 91.10 points or 1.75 percent to 5,103.20.

In the banking sector, ANZ Banking, Westpac (WBK), National Australia Bank and Commonwealth Bank are lower in a range of 2.3 percent to 2.8 percent.

In the mining space, BHP Billiton (BHP) and Rio Tinto (RIO) are down more than 3 percent each, while Fortescue Metals is losing almost 2 percent.

Meanwhile, Lynas Corp. is gaining almost 3 percent after the rare earths miner reported a loss for the full year that narrowed from last year, reflecting higher sales and cost reductions.

Gold miner Newcrest Mining is losing more than 2 percent, while Kingsgate Consolidated is up 0.7 percent. Newcrest Mining has resumed operations at its Ridgeway gold mine in regional NSW, after mining was suspended on September 6 following the death of a mine worker.

Among oil stocks, Santos is lower by more than 3 percent, Woodside Petroleum is losing almost 4 percent and Oil Search is down 1 percent following the plunge in crude oil prices.

IPH Ltd. is gaining more than 9 percent after the intellectual property services provider said it will acquire Pizzeys Patent and Trade Mark for A$73.6 million, and an additional payment of A$13.3 million subject to full-year 2016 earnings.

New Zealand-based Dairy exporter Fonterra has cut 750 jobs as part of a restructuring to cut costs. Shares of the company are advancing more than 1 percent.

In the currency market, the Australian dollar is lower against the U.S. dollar on Monday as the Federal Reserve's decision to keep interest rates unchanged left investors uncertain about the outlook for the U.S. economy. In early trades Monday, the local unit was trading at US$0.7185, down from Friday's close of US$0.7228.

Elsewhere in the Asian region, South Korea, Hong Kong and Taiwan are down more than 1 percent each, while Shanghai, New Zealand, Singapore and Indonesia are marginally lower. The markets in Japan are closed on Monday for Respect the Aged Day.

On Wall street, stocks closed lower on Friday, as Thursday's Fed Reserve decision to leave interest rates unchanged pointed to continued uncertainty for the markets for at least the next month. The Fed's comments indicating that recent global economic and financial developments may restrain economic activity somewhat also generated some negative sentiment.

The Dow plummeted 289.95 points or 1.7 percent to 16,384.79, the Nasdaq tumbled 66.72 points or 1.4 percent to 4,827.23 and the S&P 500 plunged 32.12 points or 1.6 percent to 1,958.08.

The major European markets also moved notably lower on Friday. While the U.K.'s FTSE 100 Index slumped by 1.3 percent, the French CAC 40 Index plunged by 2.6 percent and the German DAX Index plummeted by 3.1 percent.

U.S. crude oil futures plummeted nearly 5 percent to settle lower Friday, on demand growth concerns after the Federal Reserve decision not to hike interest rates sparked off fears of widespread global economic slowdown.

Crude oil futures for October delivery plunged $2.22 or 4.7 percent to settle at $44.68 a barrel on the New York Mercantile Exchange.

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