Asia report: Markets fall on back of Wall Street losses

Markets in Asia were lower across the board on Thursday, following Wall Street’s lead, as bourses in the US plunged overnight.

In Japan, the Nikkei 225 was down 1.53% at 28,197.42, as the yen weakened .12% against the dollar to last change hands at JPY 104.23.

Of the major components on the benchmark index, robotics specialist Fanuc was down 1.01%, Uniqlo owner Fast Retailing lost 0.24%, and technology giant SoftBank Group was 3.6% weaker.

The broader Topix index was off 1.14% by the end of trading in Tokyo, at 1,838.85.

Fresh economic data out of Japan showed the country’s retail sales falling 0.3% year-on-year in December, slightly ahead of the 0.4% decline expected.

On the mainland, the Shanghai Composite was down 1.91% at 3,505.18, and the smaller, technology-centric Shenzhen Composite was off 2.82% at 2,352.75.

South Korea’s Kospi was 1.71% weaker at 3,069.05, while the Hang Seng Index in Hong Kong lost 2.55% to 28,550.77.

Shares in Cathay Pacific descended 9.71% by the end of trading in the special administrative region, after the airline announced the issue of convertible bonds worth HKD 6.74bn.

The blue-chip technology stocks were weaker in Seoul, with Samsung Electronics down 2.22% and SK Hynix falling 4.28%.

The losses in Asia came after a dire day on Wall Street overnight, in which the S&P 500 wiped out its gains for the year so far and the Dow Jones Industrial Average had its worst session since October.

Those moves came despite the Fed sating market expectations by keeping interest rate targets near zero, and maintaining its bond buying programme at above $120bn each month.

“Stock markets have continued their run of losses from yesterday, as the market rally faces its first real test,” said IG chief market analyst Chris Beauchamp.

“For a global stock market that has enjoyed such solid gains since November such weakness should not be surprising, but as ever the speed of the drop has come as a surprise.

“The overall rally has slowly lost momentum in recent weeks, and the laws of physics have finally taken effect - what can’t keep going higher has to fall.”

Beauchamp said Wednesday’s Fed meeting failed to provide any excitement, and no indication of any more direct support from Powell the FOMC, while earnings season was falling into the ‘good enough’ category, leaving markets vulnerable to some near-term weakness.

“Crucially, there was no real sign of any late-session buying in the US yesterday, with indices finishing the day near their lows.

“This should be taken as an indication that the losses are expected to continue.”

Oil prices were mixed as the region went to bed, with Brent crude last up 0.07% at $55.85 per barrel, while West Texas Intermediate lost 0.15% to $52.77.

In Australia, the S&P/ASX 200 was down 1.93% at 6,649.70, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was 2.15% weaker at 13,086.46.

Both of the down under dollars were weaker against the greenback, with the Aussie last off 0.57% at AUD 1.3125, and the Kiwi retreating 0.33% to NZD 1.4015.