Forexpros – Asian stocks dropped early Monday on fears the European debt crisis is heating up in the large Spanish economy, while recent growth rates out of China that came in a little weaker than hoped also fueled the selloff.
During Asian trading on Monday, Hong Kong’s Hang Seng Index was down 0.45%, Australia’s S&P/ASX200 was down 0.41%, while Japan’s Nikkei 225 Index was down 1.34%.
In Europe, yields have been rising in Spanish government bond auctions, fueling fears that Spain will be the next eurozone country in need of either a bailout or European Central Bank intervention in the country’s bond market to ease credit conditions.
Calls for the ECB to buy Spanish bonds have been growing, as such a move would lower borrowing costs and bring more immediate calm.
Meanwhile, reports that European officials are prepared to ask the International Monetary Fund to bolster its financial war chest to contain the crisis sent investors selling equities in exchange for the safety of the dollar and yen.
Recent Chinese growth figures also weighed down on stock prices Monday.
China’s gross domestic product grew 8.1% in the first quarter, below expectations for 8.3% growth and well beneath the fourth quarter’s 8.9% expansion.
Over the weekend, the People’s Bank of China widened the range in which the yuan trades against the dollar for the first time since 2007, meaning Beijing is likely viewing its future with more confidence.
Yet disappointing U.S. consumer data helped dampen spirits.
The Thomson Reuters/University of Michigan’s consumer sentiment fell to 75.7 for April from 76.2 in March, mainly due to fears that high gasoline prices will eat into household budgets.
On the U.S. employment front, weekly initial jobless claims hit an unexpected 380,000, the government reported last Thursday, above expectation for 355,000 claims.
In Hong Kong, the top decliners included China Resources, down 2.24%, HSBC Holdings, down 1.91%, and China Merchant Holdings, down 1.80%.
Top Australian decliners included Energy Worldwide Corporation, down 7.56%, Gryphon Minerals, down 5.31%, and Intrepid Mines Limited, down 5.26%.
European stock futures indicated a mixed opening.
France’s CAC 40 futures pointed to a loss of 0.15%, while Germany’s DAX 30 futures signaled a loss of 0.26%. Meanwhile, in the U.K., the FTSE 100 futures indicated a gain of 0.11%.
Dow Jones Industrial Average futures were down 0.15% while the S&P 500 futures were also down 0.15%.
Later Monday, the U.S. will release data on the country’s retail sales, a key gauge to overall economic activity, hits the wire.
The U.S. will also unveil a report on manufacturing activity in New York, as well as government data on net long-term securities transactions and business inventories.
In Europe, trade balance figures are due out, while in Japan, Bank of Japan (BOJ) Governor Masaaki Shirakawa is due to speak in public.
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