Most of the Asian stock markets declined Tuesday, following losses on Wall Street overnight as increased political uncertainty in France and the Netherlands as well as disappointing eurozone manufacturing and services PMIs weighed on the sentiment.
The Japanese benchmark Nikkei declined 0.78 percent or 74.13 points to 9,468.04 and South Korea’s Seoul composite fell 0.47 percent or 9.21 points to 1,963.42, while Hong Kong’s Hang Seng gained 0.26 percent and Chinese Shanghai ended flat.
Dutch Prime Minister Mark Rutte and his cabinet resigned Monday after failing to agree on budget terms aimed at adopting additional austerity measures in order to reduce public deficit to below 3 percent next year.
“The general election should take place before the summer because of the pressure to come up with a comprehensive package of spending cuts,” said a note from Credit Agricole citing non-official sources.
“The Netherlands posted two consecutive quarters of negative growth in Q3 and Q4 and the public deficit for 2011 was estimated at 4.7 percent of GDP compared to initial target of 3.7 percent. Without the additional cuts, the nation’s fiscal 2012 deficit is expected to reach 4.6 percent compared to a target of 4.1 percent,” the note said.
Economic news from the Europe also added to the pressure as German, French and European PMIs all were at or below expectations and except for German Flash Services PMI were a contractionary number.
In Japan, exporter companies’ shares dragged lower by stronger yen. Canon Inc. declined 1.06 percent and Sony Corp. fell 1.7 percent, while Honda Motor Co. slipped 0.31 percent.
Advantest Corp. surged 4.47 percent on the news that its operating profit probably reached more than 6 billion yen ($74 million) in the quarter ended March, buoyed by growing shipments, Bloomberg reported citing the Nikkei newspaper.