Asian markets lower as global rally loses steam
HONG KONG — Most Asian stock markets extended their losses Wednesday as the global rally continued to lose steam amid concerns about the pace of any economic recovery.
More signs of economic weakness in the U.S. inspired caution among investors, and softer prices for crude oil and metals in recent days pulled commodity stocks lower.
With some indexes up more than 50 percent since March on expectations of an economic turnaround this year, markets have begun to falter amid worries stock prices have gotten too far ahead of economic fundamentals.
News that American industrial production fell by a bigger-than-expected 1.1 percent last month gave investors in Asia, as in the U.S. overnight, even more reason to hold back. It was the seventh straight monthly drop in industrial production and distracted traders from more upbeat figures on home construction, building permits and inflation.
“The market is losing a little bit of momentum after the rally,” said Winson Fong, managing director at SG Asset Management in Hong Kong, which oversees about $2 billion in equities in Asia. “Some sort of the healthy correction is expected in the near term. But I think the economic fundamentals will catch up.”
Hong Kong’s Hang Seng index lost 239.78, or 1.3 percent, to 17,925.72, and South Korea’s Kospi shed 0.8 percent to 1,388.15.
Australia’s benchmark fell 1.4 percent, India’s Sensex dropped 0.8 percent and Shanghai’s stock measure was off 0.7 percent.
Japan bucked the downward trend with the Nikkei 225 stock index gaining 58.06, or 0.6 percent, to 9,810.94.
Overnight, the Dow Jones industrial average fell 107.46, or 1.3 percent, to 8,504.67. The Standard & Poor’s 500 index fell 11.75, or 1.3 percent, to 911.97, while the Nasdaq composite index fell 20.20, or 1.1 percent, to 1,796.18.
U.S. stock futures pointed to modest gains Wednesday on Wall Street. Dow futures rose 8 points, or 0.1 percent, to 8,522 and S&P futures gained 2.1, or 0.2 percent, to 909.90.
Oil prices hovered above $70 a barrel Wednesday in Asia, with benchmark crude for July delivery up 35 cents to $70.82. On Tuesday, the contract fell 15 cents.
In currencies, the dollar was higher at 96.61 yen from 96.17 yen. The euro rose to $1.3861 from $1.3813.
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