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September 26, 2017

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Asian markets down over IMF growth revision

HONG KONG--Asian markets mostly fell Wednesday as investors reacted to losses on Wall Street after the IMF cut its global growth forecast, predicting the slowest rate in three years.

Japanese shares were also hit by the strong yen, with selling stoked by news the country's top carmakers saw sales in China slump in September owing to a diplomatic spat between Tokyo and Beijing.

Tokyo tumbled 1.98 percent, or 173.36 points, to 8,596.23 — its lowest since Aug. 3. Sydney lost 0.32 percent, or 14.6 points, to close at 4,490.7 and Seoul was off 1.56 percent, or 30.82 points, at 1,948.22.

Hong Kong ended flat, edging down 17.68 points to 20,919.60, but Shanghai rose 0.22 percent, or 4.71 points, to 2,119.94.

The International Monetary Fund on Tuesday further cut its growth estimates for the world economy this year and next, citing the ongoing European debt crisis and stuttering U.S. growth.

The latest Global World Outlook, which noted that Asia was being hit by a slowdown in China, also warned that conditions could worsen if the eurozone problems were not dealt with.

It followed a similar downward revision for Asia's growth by the World Bank and the Asian Development Bank.

"Markets have gone a bit too far and people are starting to get worried about the growth outlook," said Matthew Sherwood, head of investment market research at Perpetual in Sydney.

On Wall Street the Dow lost 0.81 percent, the S&P 500 slid 0.99 percent and the Nasdaq shed 1.52 percent, with sentiment also depressed by concerns over the upcoming corporate earnings season.

Global markets have enjoyed strong gains recently after the U.S., Japanese and European central banks unveiled monetary easing schemes to kickstart lending and jobs.

Japanese shares were hit again as the IMF report led dealers to buy the safe-haven yen.

"Japan got its first 'IMF shock' Tuesday, but the fallout in the U.S. market will serve as a double-whammy," said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities.

"Combined with the rise in the yen, stocks will be in full retreat," Nishi told Dow Jones Newswires.

On currency markets the euro slipped to US$1.2850 and 100.66 yen in early European trade from US$1.2881 and 100.77 yen in New York late Tuesday. The dollar was at 78.30 yen from 78.23 yen.

Car giants Toyota, Nissan and Honda were hit by a dive in Chinese car sales as an islands row between China and Japan continues.

Toyota saw monthly sales in China, the world's biggest car market, slump 48.9 percent year-on-year last month, while Nissan sales there tumbled 35.3 percent and Honda dropped 40.5 percent.

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