Asian stock markets mostly ended lower Wednesday, following declines on Wall Street Overnight, as concerns over corporate earnings outlook and euro zone crisis weighed on the sentiment.
Japanese benchmark Nikkei fell 0.08 percent or 6.73 points to 8851.00, South Korean KOSPI declined 0.17 percent or 3.06 points to 1826.39 and Indian benchmark BSE Sensex fell 0.53 percent while Hong Kong's Hang Seng gained 0.12 percent and Chinese Shanghai composite rose 0.51 percent.
Investors are worried that the eurozone debt crisis and slowing global economic conditions will dent corporate earnings. Alcoa Inc. kicked off the second quarter earnings season (April-June) in the U.S., but profit warning by the number of U.S. companies, including chipmakers Applied Materials and Advanced Micro Devices, fueled concerns about the earnings outlook.
A recent study of 85 S&P 500 companies by Thomson Reuters suggested that U.S. earnings are trending downward because of overseas troubles. Nearly half of the companies surveyed cited headwinds from Europe, currency movements and the deteriorating global economic environment as negatively influencing their earnings.
“It seems like the first signs indicate that earnings are going to be mediocre, and so there's not a whole lot to rely on in terms of propping up the market,” Bryant Evans, investment advisor and portfolio manager at Cozad Asset Management, Illinois, told Reuters.
Market sentiment was also hurt by worries about the debt burden in the euro zone as the measures announced at the European finance ministers’ meeting in Brussels to support the country do not seem to change the view of market players that Spain will require a full sovereign bailout in the fairly near future.
In Japan, exporter companies with large European exposure declined as the yen strengthened against the euro. Sony Corp. fell 2.20 percent and Mazda Motor declined 2.02 percent, while NEC Corp. plunged 4.46 percent.
In Hong Kong, financials were lower on concerns about banks' exposure to bad loans. The Agricultural Bank of China fell 0.66 percent and the Bank of China slipped 1.39 percent while the Industrial & Commercial Bank of China declined 1.92 percent.
South Korean shares fell for the fourth straight day, led by declines from chip makers Samsung Electronics and SK Hynix Inc after profit warning by the U.S. rivals. Samsung Electronics fell 0.80 percent and SK Hynix Inc. plunged 3.16 percent.