Forexpros – Asian stock markets were broadly lower on Tuesday, after a report showing a slowdown in foreign direct investment into China added to concerns over the health of the global economy.
During late Asian trade, Hong Kong’s Hang Seng Index fell 0.8%, Australia’s ASX/200 Index declined 0.4%, while Japan’s Nikkei 225 Index eased down 0.1%.
Concerns over China’s economic outlook intensified after data released earlier showed that foreign direct investment into China in March declined 6.1% from a year earlier to USD11.76 billion.
The data from China added to recent jitters over the global economy, especially in China, the world’s second largest economy. Data released from the country last week showed that the Chinese economy grew at the slowest pace in almost three years in the first quarter.
Meanwhile, in the U.S., official data showed that retail sales in rose more-than-expected in March, but manufacturing activity in the New York-region slowed to the lowest level since November.
A deeper slowdown in the U.S. and China would impair a global expansion that is already faltering because of the implementation of harsh austerity measures in Europe.
The news weighed on financial sector stocks in Hong Kong, with China Construction Bank shares dropping 2.8%, Bank of China shares slumping 1.25%, and insurance giant Ping An declining 1.4%.
Meanwhile, shares in the airline sector came under pressure for a second day, after China Eastern Airlines and China Southern Airlines issued profit warnings late last week. China Eastern slumped 3.45%, while China Southern declined 3.3%.
Europe-focused retailer Esprit Holdings also contributed to losses, tumbling 3.65% amid fears that the euro zone’s debt crisis was flaring up again as Spain’s borrowing costs approached levels that prompted Portugal, Ireland and Greece to seek international bailouts.
Elsewhere, in Japan, the Nikkei fluctuated between modest gains and losses throughout most of the session as market participants were looking forward to the Bank of Japan’s policy meeting next week.
The Nikkei rallied more than 19% in the first three months of the year, buoyed in large part by an unexpected easing announcement by the Bank of Japan in February, but the index has fallen nearly 6% since the start of April.
Most traders expect the correction to continue until the end of the month, when the BoJ meets for its April policy meeting, amid expectations the central bank will implement new easing measures.
Toshiba Tec, a unit of Toshiba, rallied 6.85% after the Nikkei newspaper said the Japanese firm would buy IBM’s point-of-sale terminal business for nearly USD870 million. Toshiba added 0.75% on the news.
Shares in scandal-ridden Olympus dropped 2.3% after an executive said two board members plan to remain division heads after resigning as directors.
Meanwhile, in Australia, miners declined amid concerns over the health of the global economy. Rio Tinto shares dipped 0.9%, while BHP Billiton fell 0.5%.
Looking ahead, European stock markets were set to open lower, pressured by expectations that Spain’s borrowing costs would rise at an auction of short-term government debt later in the day.
The EURO STOXX 50 futures pointed to a loss of 0.15%, France’s CAC 40 futures fell 0.3%, London’s FTSE 100 futures dipped 0.2%, while Germany’s DAX futures pointed to a loss of 0.1% at the open.
Later in the day, the ZEW Centre for Economic Research was to publish reports on economic sentiment in Germany and the single currency bloc. The euro zone was also to produce official data on consumer price inflation, while European Central Bank President Mario Draghi was to speak.
Also Tuesday, the U.S. was to produce government data on building permits, housing starts and industrial production.
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