Most Asian stocks sink on US sell-off

AP News
Posted: Jan 13, 2014 10:52 PM

HONG KONG (AP) — Most Asian stock markets sank Tuesday, led by Japan, following a big sell-off in the U.S.

Investors in Asia took their cues from the U.S., where markets had their worst day of the year so far. Confidence among investors, who are assessing the prospect of further gains after a strong 2013, was sapped by a weak U.S. employment report last week.

Japanese stocks resumed trading after a holiday Monday, with the Nikkei 225 diving 2.1 percent to 15,585.89. Investors were getting their first chance since Friday to react to the U.S. jobs report, which showed December hiring slowed sharply, as well as the movement in the yen, which has risen strongly since last week.

Hong Kong's Hang Seng inched down 0.1 percent to 22,858.44 and Seoul's Kospi dropped 0.2 percent to 1,943.89. Australia's S&P/ASX 200 dived 1.3 percent to 5,225.50. China's benchmark Shanghai Composite Index, however, added 0.6 percent to 2,020.98.

"Equity markets and risk assets in general are having a decidedly shaky start to the year," Mitul Kotecha, head of global markets research for Asia at Credit Agricole CIB, said in an email. "Worries ahead of fourth quarter earnings releases and perhaps concerns about the economy in the wake of the disappointing U.S. December jobs report weighed on U.S. equities overnight."

Markets have also been perturbed by comments from the president of the Federal Reserve's Atlanta branch raising the prospect of ongoing reductions in economic stimulus. Dennis Lockhart said Monday he would support further cuts "over the course of this year" if the economy continued to improve.

The Fed has said it will make an initial $10 billion cut to its $85 billion of monthly bond purchases that have supported economic recovery by keeping interest rates low.

The Dow Jones industrial average fell 1.1 percent to 16,257.94. The Nasdaq composite dropped 1.5 percent to 4,113.30. The Standard & Poor's 500 dropped 1.3 percent to 1,819.20, its biggest decline since Nov. 7.

In energy markets, benchmark crude for February delivery was up 14 cents to $91.94 in electronic trading on the New York Mercantile Exchange. The contract fell 92 cents to close at $91.80 on Monday.

In currencies, the dollar strengthened to 103.44 yen from 103.21 yen in late trading on Monday. The euro was little unchanged at $1.3666.