Most of the Asian markets fell Wednesday as investor confidence was weighed down by the report that Japan's trade deficit increased in July, raising more concerns about the faltering global economy.
The Chinese Shanghai Composite fell 0.38 percent or 8.01 points to 2110.25. Hong Kong's Hang Seng was down 0.86 percent or 172.25 points to 19927.84. Among major losers were Sands China Ltd (1.78 percent) and PetroChina Co Ltd (2.13 percent).
Japan's Nikkei Stock Average was down 0.86 percent or 78.89 points to 907803. Among major losers were Dentsu Inc (3.56 percent), JFE Holdings Inc (3.35 percent) and Fuji Electric Co Ltd (3.26 percent).
South Korea's KOSPI Composite Index fell 1.23 percent or 23.85 points to 1919.37. Shares of Samsung Electronics Co Ltd declined 1.72 percent and those of Hyundai Motor Co dropped 1.44 percent.
India's BSE Sensex dropped 0.16 percent or 28.06 points to 17857.20. Among major losers were Central Bank (2.18 percent), Canara Bank (0.99 percent) and Sesa Goa (0.85 percent).
Japan reported Wednesday a rise in trade deficit in July compared to the previous month with a decrease in exports and an increase in imports. The Finance Ministry data showed that the country recorded 517.4 billion yen ($6.5 billion) trade deficit in July, down from 60.3 billion yen surplus in June. While exports dropped 8.1 percent to 5.31 trillion yen from a year earlier indicating the soft global demand, imports rose 2.1 percent to 5.83 trillion yen as the nuclear energy crisis has resulted in the increased need of oil and gas.
There was a slump of 25.1 percent in exports to the European Union compared to the previous year. While exports to China dropped 11.9 percent, exports to the U.S. rose 4.7 percent. The continuing debt crisis in Europe and the tentative U.S. recovery have hurt the demand for exports, the key driver of Japan's economy.
Japan's GDP figures have already revealed that growth slowed down in the second quarter compared to that in the first quarter.
Investors feel that the Bank of Japan will have to come up with bold measures to improve the country's economic condition.
The biggest drag on the global growth continues to be the debt burden faced by the euro zone. With the increase in borrowing costs weighing down the Spanish and Italian economies, investors sense that the European Central Bank will have to urgently announce the bond purchasing policy.