Asia report: Stocks suffer heavy losses in regional sell-off

Equity markets suffered heavy losses across the Asia-Pacific region on Tuesday, after a roller-coaster session on Wall Street overnight.

In Japan, the Nikkei 225 was down 1.66% at 27,131.34, as the yen strengthened 0.17% on the dollar to last trade at JPY 114.14.

Of the major components on the benchmark index, robotics specialist Fanuc was down 0.95%, Uniqlo owner Fast Retailing lost 0.26%, and technology investing giant SoftBank Group tumbled 5.34%.

The broader Topix index was off 1.72% by the end of trading in Tokyo, settling at 1,896.62.

On the mainland, the Shanghai Composite was 2.58% lower at 3,433.06, and the smaller, technology-centric Shenzhen Composite slid 3.31% to 2,313.06.

South Korea’s Kospi was down 2.56% at 2,720.39, while the Hang Seng Index in Hong Kong lost 1.67% to 24,243.61.

The blue-chip technology stocks were on the back foot in Seoul, with Samsung Electronics down 1.46% and SK Hynix slipping 0.84%.

Auto manufacturer Hyundai Motors fell 1.27% after it reported an almost halving in fourth quarter net profit to KRW 547bn, from the KRW 1.1trn it recorded a year ago.

On the economic front in South Korea, the country’s economy expanded 1.1% quarter-on-quarter in the fourth quarter, and 4% for the year, which Reuters reported was the best GDP growth for 11 years.

Oil prices were higher as the region went to bed, with Brent crude last up 1.22% at $87.32 per barrel, and West Texas Intermediate rising 1.09% to $84.22.

“US markets continued the negative theme after Europe had closed, with the S&P 500 and Nasdaq 100 both hitting seven-month lows, before finishing a whiplash-inducing day to finish higher on the day,” said CMC Markets chief market analyst Michael Hewson of market movements overnight.

“It’s hard to know, having been down by 5% at one point yesterday, what caused the sudden turnaround in the Nasdaq 100, or the rest of US markets for that matter, but even with yesterday’s late recovery, both the S&P 500 and Nasdaq 100 are still down over 5% from last week’s highs, which suggests we may have seen some a bit of bargain hunting, when both markets hit their 10% correction threshold.

“As a result of yesterday’s startling rebound in the US, markets here in Europe look set to open higher this morning, despite a negative Asia session, with the volatility set to continue, with the only US economic numbers of consequence being US consumer confidence for January as the latest two-day Federal Reserve rate meeting gets under way.”

In Australia, the S&P/ASX 200 was 2.49% lower at 6,961.60, with financials, energy plays and miners in the red across Sydney’s bourse.

Among the major banks, Australia and New Zealand Banking Group was down 3.6%, Commonwealth Bank of Australia lost 2.04%, National Australia Bank was down 2.91%, and Westpac Banking Corporation was 2.84% weaker.

On the energy subindex, Beach Energy plunged 7.77%, Santos was 4.82% lower, and Woodside Petroleum was off 3.98%.

The moves in the sunburnt country came after inflation data showed consumer prices rising 1.3% quarter-on-quarter in the final part of 2021, and 3.5% for the year, making for the quickest price rises since 2014.

“All three measures of [the] Australian consumer price index - headline, trimmed mean and weighted median - have come in higher than expected,” said analysts at Rabobank.

“Juxtaposing with this was that the business confidence reading came in considerably lower than the prior month’s figure.

“This is the lowest reading since May 2020.”

Across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.52% to 12,128.21, led lower by cinema technology company Vista Group, which tumbled 6.5%.

Specialist dairy producer A2 Milk bucked the trend, however, rocketing 6.2% from its recent five-year low amid rumours that it could be a takeover target for Canadian dairy giant Saputo.

The down under dollars were both stronger on the greenback, with the Aussie last ahead 0.1% at AUD 1.4011, and the Kiwi advancing 0.31% to NZD 1.4974.