Asian shares tumbled on Friday, as fears of contagion from Greece's political turmoil and deepening worries about the health of Spanish banking system following reports of customers withdrawing more than 1 billion euro from Bankia -the recently nationalized Spanish bank, rattled investors. Weak readings on the U.S. economy and concerns of a hard landing in China amid the recent spate of poor data also raised fears of a global slowdown.
Risk aversion intensified after Moody's announced a sweeping downgrade of 16 Spanish banks, citing rising loan defaults, a renewed recession in Spain, restricted funding access and the reduced ability of the Spanish government to support lenders.
Debt-laden Greece also remained on the radar of investors after Fitch downgraded the nation's credit rating by one notch deeper into junk territory, warning of a "probable" Greek exit from the 17-country euro currency union.
Commodities such as copper and crude traded mixed, while the euro lost ground. Gold futures were seen rising, adding to the sharp rebound overnight.
Japanese shares hit a four month closing low, with financial stocks falling heavily, as fresh concerns about the health of Spanish banks stoked concerns the European debt crisis is worsening. The Nikkei average slumped 3 percent to 8,611.3, its lowest closing level since Jan 18, while the broader Topix index shed 2.9 percent. Sumitomo Mitsui Financial Group shed 3 percent, Mitsubishi UFJ Financial Group fell 3.4 percent, Nomura Holdings plunged 5.6 percent and Daiwa Securities lost 5.2 percent.
Exporters also bore the brunt of the selling, with Toyota Motor, Tokyo Electron, Nikon and Advantest tumbling 4-8 percent, as the dollar slumped against the yen overnight in reaction to disappointing U.S. data. Machinery makers Komatsu and Hitatchi Construction Machinery slumped 6-10 percent after industry bellwether Caterpillar said its sales growth slowed in April.
China's Shanghai Composite index fell 1.4 percent to a one-month low, with heavyweight financials and property developers pacing the declines on concerns over Europe's debt crisis and a weakening domestic economy. Hong Kong's Hang Seng index shed 1.3 percent, extending losses for a third day in a row, as growing worries about a breakup of the European currency union weighed on financials.
Australian shares tumbled, as worries over Europe's debt woes and U.S. growth coupled with weak home price and business confidence numbers from China, Australia's biggest trading partner, increased risk aversion. The benchmark S&P/ASX 200 fell 2.7 percent, suffering its biggest fall in seven months, while the broader All Ordinaries index dropped 2.6 percent. Earlier in the day, the ASX/200 fell to 4,026.5, its lowest level since November 28 last year.
Resource stocks bore the brunt of the selling, with BHP Billiton tumbling 4 percent to almost a three-year low, while Rio Tinto and smaller rival Fortescue slumped over 5 percent each. Gold miner Newcrest bucked the downward trend to end 3.8 percent higher after the price of the precious metal saw its biggest one-day rise since January last night.
Among banks, ANZ fell 3.4 percent to its lowest level since January, while Commonwealth, Westpac and NAB dropped 3-4 percent, investment bank Macquarie Group shed 2.1 percent and insurer QBE lost 3.1 percent. Billabong International lost 2.3 percent after founder and major shareholder Gordon Merchant backed the appointment of newly appointed chief executive Launa Inman to run the struggling surfwear group.
South Korea's Kospi average plunged 3.4 percent to end at its lowest closing level of the year, as fears of possible contagion from Spain's ailing banking system and continued concerns about Greece's future spooked investors. Risk averse foreign investors remained net sellers for a 13th straight session, offloading shares worth a net 3.2 trillion won, data showed.
Financials were sold off heavily, with KB Financial, Hana Financial and Shinhan Financial Group tumbling 3-5 percent, after Moody's downgraded Spanish lenders, citing renewed recession and the Spanish government's reduced ability to shore up the banks. Heavyweight Samsung Electronics slumped 4.7 percent and Hyundai Motor, South Korea's largest automaker, lost 4.8 percent.
New Zealand shares outperformed their regional peers, falling modestly compared to steep losses across the Asia-Pacific region. The benchmark NZX-50 index eased 0.6 percent in low volume trading, with dual-listed Australian banks pacing the declines on concerns about Europe's worsening financial problems. ANZ tumbled 2 percent and Westpac slumped 3.3 percent, while financial services firm AMP lost 2.1 percent.
Children's clothing chain Pumpkin Patch plunged 6.5 percent, jeweler Michael Hill lost 2.8 percent and infrastructure investor Infratil fell 2.4 percent. Among heavyweight stocks, Fletcher shed half a percent and Telcom declined 0.8 percent, while Contact Energy rose 0.6 percent. Gold miner OceanaGold led the gainers, climbing 6.6 percent as gold rebounded from a 4-1/2 month low overnight.
India's benchmark Sensex erased early steep losses and was last trading up 0.7 percent, as the rupee recovered from a record low versus the dollar and state-run lender SBI reported better-than-expected fourth-quarter results, aided by higher interest income and lower provisioning.
Elsewhere, Indonesia's Jakarta Composite index was down 1.6 percent, Malaysia's KLSE Composite fell 0.8 percent, Singapore's Straits Times index lost 1.5 percent and the Taiwan Weighted average tumbled 2.8 percent.
On Wall Street, stocks posted notable losses overnight, as weaker-than-expected data on regional manufacturing activity and the Conference Board's leading economic indicators index coupled with news that Fitch Ratings has downgraded Greece's long-term debt ratings sparked risk aversion.
The Dow and the S&P 500 fell 1.2 percent and 1.5 percent, respectively, to hit four-month closing lows, while the tech-heavy Nasdaq dropped 2.1 percent to end at its lowest level in over three months.
by RTT Staff Writer
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