Asian stocks fall sharply as China market unravels
HONG KONG — Most Asian stock markets dropped sharply Wednesday, with Shanghai’s index tumbling as much as 5 percent, amid concerns the recent rally was petering out.
Regional markets were modestly higher through the morning in lethargic trade before getting whacked later in the day. Crude oil prices along with Wall Street futures gave back their early gains.
The drop came on the heels of a steep fall in world markets Monday when investors fretted over weakness in American consumer spending. They were also spooked by losses in Shanghai that seemed to augur an end to the five-month rally that’s boosted benchmarks over 50 percent.
Some analysts said there were concerns that China’s high-flying markets were overshooting the country’s economic outlook and due for a correction.
“The markets are high and the valuations are getting ahead of the economy. Investors are starting to wake up to that fact,” said Francis Lun, general manager of Fulbright Securities in Hong Kong.
Japan’s benchmark Nikkei 225 stock average lost 80.96 points, or 0.8 percent, to 10,204.00.
Shanghai’s index dived 125.30 points, or 4.3 percent, to 2,785.58 after being down about 5 percent at one point. Hong Kong’s Hang Seng shed 1.9 percent to 19,916.74.
Elsewhere, Korea’s Kospi fell 0.3 percent, India’s Sensex was 2 percent lower and Taiwan’s index was flat. Australia’s benchmark lost 0.2 percent.
Overnight in the U.S, stronger-than-expected retail earnings reports and the latest reading on housing sent markets to a higher finish following a bout of heavy selling on Monday.
The Dow rose 82.60, or 0.9 percent, to 9,217.94. The Standard & Poor’s 500 index gained 9.94, or 1 percent, to 989.67, while the Nasdaq composite index rose 25.08, or 1.3 percent, to 1,955.92.
In futures trading, Dow futures were down 82 points, or 0.9 percent, at 9,125 and S&P futures lost 9.4, or 1 percent, to 980.20.
Oil prices were unable to hold on their advance in Asia, losing 31 cents to $68.88 a barrel. On Tuesday, the contract gained $2.44 to settle at $69.19.
The dollar fell to 94.22 yen from 94.70 yen, while the euro fell to $1.4100 from $1.4131.
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