Asian markets slump

Global fears wipe another $24b off market

Australian shares slumped to a six-month low today as investors joined a global flight out of risky assets, triggered by fresh concerns over a global economic slowdown after anemic US jobs figures and soft Chinese factory data.

SMH,

4 June, 2012

The benchmark S&P/ASX200 index plunged 78.9 points, or 1.9 per cent, to 3985, losing grip on the psychological 4000 level and hitting its lowest mark since November 25. The broader All Ordinaries index lost 83.5 points, or 2 per cent, to 4033.4.

Among the sectors, energy stocks fell 3.3 per cent, materials dropped 2.8 per cent and financials lost 1.7 per cent. Gold miners and telcos were the only two sectors to post gains, adding 2.7 and 0.5 per cent respectively.

The day's losses wiped another $24 billion off the market's value and took the slump since May 1 to 10.4 per cent, meeting the usual definition of a market correction. For the year, the benchmark index is down 1.75 per cent.

US woes weigh on market

Local market players took their cues from a big selloff on Wall Street that was prompted by a weak US jobs report.

IG Markets strategist Stan Shamu said the US jobs data showed it was ‘‘now clear that not all the macro risks are confined to Europe’’.

Heavy losses were posted across the board, with global miner Rio Tinto down 4.7 per cent, steelmaker BlueScope down 9.4 per cent to a record low, and several major retailers losing more than 3 per cent.

"The fear factor in markets has increased. When markets do start falling like this it has a huge impact on investor and consumer sentiment and it makes it problematic for companies themselves," said White Funds portfolio manager Angus Gluskie.

Still, he said policy moves in Europe, China and the US and prospects of fresh rate cuts by the Reserve Bank tomorrow should help underpin sentiment over time.

"In Europe, governments are talking about growth policies on top of fiscal control and that is the combination that ultimately gets countries out of the spiral of austerity and low growth," Mr Gluskie said.

Australia's top miners were especially hard hit, tied to the fortunes of global growth. BHP Billiton dropped 3.1 per cent to $30.75, its lowest level since March 2009 and Rio Tinto was at its lowest since July 2009.

"Investors are just fleeing risk assets," said ATI Asset Management chief investment officer Simon Burge, noting bond yields have hit all-time lows which did not happen even during the global financial crisis.

Mid-tier miners hammered

Mid-tier resources stocks were hammered, with Atlas Iron sliding 6.1 per cent and Whitehaven closing down 5.4 per cent.

Losses were heavy in the discretionary retail sector, with many retailers down more than 3 per cent. Electronics chain JB Hi-Fi fell 6.1 per cent and camping gear store Kathmandu fell 5 per cent.

Gold stocks were the few gainers amid the sea of red, with Newcrest advancing 1.7 per cent.

Shares in Brambles, the world's top pallet supplier, were halted ahead of an equity raising after the firm called off the sale of its $2 billion Recall information management business because of low offers and choppy markets.

Gloucester Coal shareholders approved a merger with Chinese state-owned company Yancoal Australia, bringing the creation of Australia’s largest listed coal company a step closer. Gloucester Coal closed down 12 cents at $6.75.

Asian markets tumble over EU debt crisis, US jobs report

Asian shares have sharply tumbled following reports of a gloomy US employment situation as well as concerns over the possibility of a eurozone breakup.

Press TV,

4 June, 2012

Japan’s market lost over two percent on Monday morning, reaching a level not seen since late 1983, while Hong Kong plummeted over 2.3 percent.

Shanghai was 1.24 percent lower, Sydney skidded 1.84 percent and Seoul lost 2.60 percent.

The falls come as Washington has put the number of jobs created in May at 69,000 - the slowest rise in 12 months. Meanwhile, leaders across the eurozone are facing a political and economic challenge in Greece.

New data released late last week showed more signs that growth is slowing in both China and India, which have until now been relatively bright spots for the global economy.

On top of the alarming jobs outlook in the United States, investors are deeply worried about the eurozone debt crisis. Unemployment in the eurozone has hit a record high of 11 percent.

The Dow Jones industrial average fell 2.22 percent on Friday, wiping out its gains for the year, and the main index of the German stock market closed down 3.4 percent.

Greece's political and economic turmoil led to mounting concerns among eurozone members that Athens would not comply with the austerity measures it agreed to with its European neighbors in exchange for the endorsement of the second financial bailout, and would finally leave the 17-nation bloc.

The head of the European Central Bank earlier this week told European Union leaders that the single currency union is unsustainable in its current form.

"NATO and the United States should change their policy because the time when they dictate their conditions to the world has passed," Ahmadinejad said in a speech in Dushanbe, capital of the Central Asian republic of Tajikistan

Japanese Stocks Hit 28-Year Low, 9 Straight Weeks of Losses, Longest Streak in 20 Years

Global Economic Analysis

4 June, 2012

A quick check of Sunday night futures shows a certified bloodbath in Asia-Pacific including China, Australia, India, and Japan.


Above chart courtesy of Yahoo! Finance Major World Indices.

The Nikkei Index is not at a new low, however the Economic Timesreports Tokyo Broader Markets Hit 28-year Low Amid Global Rout

 TOKYO: Asian shares tumbled on Monday, pushing the broader Tokyo market to a 28-year low, as investors extended a rout of global stocks and worried about a nightmare scenario of euro-zone breakup, U.S. economic relapse and a sharp slowdown in China.

Tokyo's broader Topix index lost 2.1 percent to 693.35, a level not seen since late 1983, as Asian markets plumbed new lows for 2012. Japan's Nikkei average fell 2 percent after last week marking its ninth straight week of losses, the longest such losing streak run in 20 years.

"It's not an issue of risk-on or risk-off anymore, it's nervousness all over until a clear direction emerges on a long-term trend," said Hisamitsu Hara, chief FX manager at Bank of Tokyo-Mitsubishi UFJ.