Asian markets lower after Wall St tumbles

PUBLISHED : Wednesday, 24 October, 2012, 10:45am
UPDATED : Wednesday, 24 October, 2012, 10:45am


Asian markets fell on Wednesday, following big losses on Wall Street after weak reports and forecasts from top US companies, while fresh fears over Spain added to selling pressure.

The losses have also been stoked by profit-taking after an impressive run by global markets in recent weeks following easing measures in the United States, Japan and Europe, while China has also showed signs of a pick-up.

Tokyo shed 0.76 per cent, Hong Kong lost 0.24 per cent, Sydney fell 0.70 per cent and Seoul sank 1.01 per cent, while Shanghai eased 0.43 per cent.

Mumbai was closed for a public holiday.

Investors took fright at big falls in New York after poor earnings figures and guidance from DuPont, United Technologies, UPS, Xerox, Radio Shack and 3M provided evidence that the US corporate earnings boom is stalling,

Chemicals giant DuPont was the stand-out loser, lowering its 2012 outlook after posting a 98 per cent fall in earnings in the three months to September. It also said it would cut around 1,500 jobs over the next 18 months.

“The US earnings report season has disappointed, with 60 per cent of companies missing revenue forecasts so far,” Sean Callow, at Westpac Global Strategy group in Sydney, said in a note.

US shares tumbled. The Dow lost 1.82 per cent, the S&P 500 sank 1.44 per cent and the Nasdaq lost 0.88 per cent.

In Europe, the Bank of Spain forecast the economy would contract 0.4 per cent in the third quarter. If confirmed, the figures would mean the recession, which has left one in four workers unemployed, is moving into a second year.

Moody’s cut its debt rating for five Spanish regions by one or two notches each, blaming their weak financial positions and looming debt redemptions.

On currency markets the euro, which fell in New York, held up in Asia. The single currency bought US$1.2980 and 103.67 yen in early trade, compared with US$1.2978 and 103.64 yen in New York late Tuesday.

The US dollar was at 79.85 yen against 79.84 yen.

Oil was up in Asia Wednesday, with New York’s main contract, light sweet crude for delivery in December, adding 17 cents to US$86.84 a barrel and Brent North Sea crude for December delivery gaining 28 cents to US$108.53.

Gold was at US$1,713.40 at 0200 GMT compared with US$1,710.66 late Tuesday.