RTTNews - On concerns that the global economy will take a fairly long time to recover, investors across the Asia-Pacific region are seen pressing heavy sales on Tuesday. The World Bank's prediction of a sharper contraction for the global economy had taken a toll of European and U.S. markets on Monday, and it is now the turn of the Asian markets to embark on a journey down south.
With prices of crude oil and commodities tumbling down on fears of a sharp fall in demand, resource-related stocks across Asian markets are taking a hammering today. Stocks from banking, automobile and industrial sectors are also plunging sharply on selling pressure.
In Australia, the energy and materials indices are down by as much as 4.2% and 4.3% respectively. Mirroring the losses posted by key bank stocks, the Financial sector index is down by over 3%.
Materials stocks, BHP Billiton and Rio Tinto are down by over 4%. Bluescope, Lihir Gold, Newcrest Mining, Orica and Onesteel are also trading with sharp losses.
In the energy space, Woodside Petroleum, Origin Energy, Oil Search and Santos are trading sharply lower. Key bank stocks ANZ Bank, Commonwealth Bank of Australia, National Australia Bank and Westpac are down with sharp losses.
The Australian benchmark index S&P/ASX 200 is down by 120 points at 3,797 and the broader All Ordinaries index is trading lower by 118 points at 3,792.
In Tokyo, the Nikkei was down 303.26 points or 3.09% at 9,523.01 at the end of the morning session today. With stocks having a free fall amid fresh concerns over the economy, the index tumbled to its lowest intra-day level in three weeks this morning.
Several blue chip stocks, including those of car maker Toyota Motor and electrical machinery manufacturer Sony were ask-only for a while this morning.
Oil stocks Showa Shell Sekiyu and Nippon Oil fell sharply as crude oil prices plunged on demand concerns. Steel stocks JFE Holdings, Nippon Steel, Sumitomo Metal and Kobe Steel were also seen struggling for support.
Almost all key stocks from the non-ferrous metals, machinery and electric machinery sectors were sharply down in the red. Automobile, bank and insurance stocks also posted notable losses and not much buying was seen in construction, foods, textiles, chemicals and pharma stocks either.
The South Korean benchmark index KOSPI is also down with a sharp loss today. Mirroring sharp losses posted by stocks across various sectors, the index is currently down by over 40 points or 2.85% at 1,359.
Though stocks across the board are seen struggling, losses posted by banks as well as steel and shipbuilding stocks are more pronounced in the Korean market.
Among other markets in the Asia-Pacific region, Hong Kong is down sharply, with its benchmark Hang Seng posting a loss of 3.4%. The Jakarta Composite index of the Indonesian market is down by 3.2%. The key indices of Shanghai, New Zealand, Singapore and Taiwan are trading lower by 1.25%-2%.
Most of the markets in the Asia-Pacific region had ended Monday's session with moderate gains.
On Wall Street, stocks tumbled after the World Bank cut its forecast for the global economy and warned of a large decline in international capital flows amidst the financial market fragility. The World Bank said it now expects the world economy to shrink by 2.9 percent this year, larger than its earlier prediction of a 1.7 percent decrease.
The Dow closed lower by 200.72 points or 2.4 percent to 8,339.01, the Nasdaq fell by 61.28 points or 3.4 percent to 1,766.19 and the S&P 500 dropped 28.19 points or 3.1 percent to 893.04.
Major European markets closed firmly on the downside. The French CAC 40 Index and the German DAX Index both finished down by 3 percent, while the U.K.'s FTSE 100 Index dropped by 2.6 percent.
On Monday, crude oil plunged to its lowest close in 19 days as the World Bank's discouraging economic forecast led to worries over energy demand. Light sweet crude fell to US$66.93, a drop of US$2.62 for the session. Prices hit as low as US$66.25. The more-actively traded August crude contract fell US$2.52 to US$67.50 per barrel.
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