Asian stock markets declined on Wednesday, with miners giving up ground across the region as investors switched from hopes for monetary stimulus to worries about growth.
Japan’s Nikkei Stock Average 100000018 -0.32% turned back from early gains to end down 0.3%, South Korea’s Kospi SEU -1.48%SEU -1.48% lost 1.5%, and Australia’s S&P/ASX 200 index XJO -0.42% lost 0.4%.
In China, Hong Kong’s Hang Seng Index HSI -1.25% dropped 1.5%, while the Shanghai Composite Index 000001 +0.37% lost 0.8% to drop back to a level not seen since 2008.
The weak performance follows broad gains across Asia the day before, and despite a higher finish on Wall Street Monday, after Goldman Sachs Group Inc. GS +0.31% and Coca-Cola Co. KO +1.58% posted solid earnings reports.
Markets in the U.S. had initially pulled back on the first day of Federal Reserve Chairman Ben Bernanke’s testimony to Congress, but then recovered after he spoke about slow progress in the U.S. economy and job market. Read more on U.S. stocks.
“Bernanke indicated several policy tools available for easing and expressed his downbeat tone on the economy, which keeps quantitative-easing expectations alive in August or September,” said Kintai Cheung, strategist at Credit Agricole.
But Asia appeared to hone in on growth, according to Dankse Bank strategists, who said “focus turned towards the poor economic outlook” in the Asian trading session.
Markets are being weighed down by several key areas of uncertainty, said Jamie Spiteri at Shaw Stockbroking. He was referring to the continued slowing in Europe, an inconsistent recovery in the U.S. and moderating growth activity in Asia, notably China. Those factors were contributing “to the grey cloud of uncertainty that hangs over equities,” he said.
Australian miners were on the sharp end of concerns about China — their largest customer.
BHP Billiton Ltd. BHP +0.83%BHP +0.83% dropped 2% after reporting production figures. Read more on BHP Billiton production figures.
Rival Rio Tinto Ltd. RIO -0.34% RIO -0.34%RIO -0.34%, which updated investors on production late Tuesday, fell 3.1% a day after company chief executive Tom Albanese said global economic conditions and sentiment had dropped “markedly” in the second quarter.
Iron ore giant Fortescue Mining Group Ltd. FMG -6.67%FSUMF -1.71% lost 3.5% after a downgrade to hold from Deutsche Bank and a target-price cut by Morgan Stanley.
J.P. Morgan cut its stance on iron ore prices in order to reflect an expected drop off in demand for steel and raw materials, downgrading 2012 estimates by 7% and 2013 estimates by 10% to $135 a metric ton.
Japanese steel makers under pressure included Nippon Light Metal Co. 5701 -3.45%, down 3.5%, and Pacific Metals Co. 5541 -2.44%PFMTF -2.70% down 2.%. In Hong Kong, Aluminium Corp. of China Ltd. 2600 -1.28% ACH +1.50% fell 1.9%.
Hong Kong was additionally weighed by losses from heavyweight HSBC 5 -2.35% HSBA -0.04% HBC -0.46% which fell 2.4% after gaining sharply on Tuesday.
The bank’s London-based executive in charge of compliance will step down in response to an ongoing U.S. government investigation into money laundering. Read more on U.S. probe.
Meanwhile, government data released at the start of trading in Hong Kong showed lower June new-home prices in 57 of 70 cities surveyed compared to a year earlier, though average prices were unchanged in June from May. Read more on Chinese housing data.
Mainland Chinese property names falling Wednesday included China Resources Land Ltd. 1109 -4.79% CRBJF +0.50%, down 5%, and China Overseas Land & Investment Ltd. 688 -4.21% CAOVF +6.90%, falling 4.6%.
In Shanghai, Gemdale Corp. 600383 -8.86% dropped 9.6%, while Poly Real Estate Group Co. 600048 -4.85% fell 7%.
Nomura analyst Zhiwei Zhang in Hong Kong said firming house prices would be eyed with concern in official policy-making circles, as the gains come on the heels of a recent policy easing that included two interest-rate cuts in less than a month.
In South Korea, some financial firms came under pressure, including Korea Exchange Bank, down 3.6%, and Woori Finance Holdings Co. WF +1.99%, dropping 2.6%.
Several banks, including a unit of Woori Finance, said South Korea’s anti-trust agency visited their headquarters as part of an investigation into possible collusion on certificate of deposit rates. Read more on South Korea bank probe.
In Tokyo, power utilities tumbled to extend their steep recent declines, after the Nikkei newspaper reported that there may be active faults running underneath plants operated by both Kansai 9503 -6.30%KAEPY -1.41% and Hokuriku Electric Power Co. 9505 -21.35%
Hokuriku plunged 21.4%, while Kansai Electric Power Co. fell 6.3%. Earlier in the week, Japan saw massive demonstrations against the restarting of nuclear power reactors.
Meanwhile, Olympus Corp. 7733 +6.35%OCPNF +5.94% rose 6.4% in Japan, while Canon Inc. 7751 +0.63%CAJFF -3.95% gained 0.6%. The companies were among those named in a separate Nikkei report Wednesday, which suggested that there may be dividend hikes to come in the Japanese precision-equipment sector.