Asian stocks retreated on Friday, as a downgrade to Spain’s long-term debt rating by Standard & Poor’s and a move by Fitch Ratings to put several U.S. and European lenders, including Goldman Sachs and Morgan Stanley, on review for possible downgrades threatened to prolong the euro-region debt crisis.
Data that showed inflation remained high above the government target for the fourth straight month in China and a warning from Singapore’s central bank that “headwinds from slower global growth will mean slower growth in Singapore in the next few years” also dampened investor sentiment.
Meanwhile, investors are awaiting cues from a meeting of the G20 finance ministers and central bank governors in Paris after the leaders of France and Germany pledged to unveil a plan to solve the eurozone’s sovereign debt crisis by the end of this month.
Tokyo stocks ended notably lower, as investors remained wary over capital needs for European banks. The benchmark Nikkei closed down 0.9 percent after hitting a four-week high the day before, while the broader Topix index ended 1.3 percent lower. With many U.S. companies slated to announce their quarterly results in the coming weeks, a slight drop in third-quarter earnings of JP Morgan Chase also weighed on investor sentiment.
Microchip maker Elpida Memory plunged 6 percent on a Nikkei report that it likely posted an operating loss of more than 40 billion yen for the July-September quarter. Tokyo Electron declined 1.4 percent and Sumco Corp. slumped 7.2 percent.
Softbank Corp. fell 2.7 percent, ending down for the first time in five sessions, after a computer glitch halted its iPhone 4S sales nationwide for three hours. Olympus plummeted 17.6 percent after the precision equipment maker dismissed its CEO and president over his management style. Among those that gained, Japan Tobacco closed up 3.4 percent and JFE Holdings Inc. gained 1.5 percent.
China’s Shanghai Composite index lost 0.3 percent but ended the week up over 3 percent after Central Huijin Investment, a unit of the $US400 billion China Investment Corporation, increased its stake in the “Big Four” Chinese lenders earlier this week.
In economic news, Chinese inflation eased for a second consecutive month in September after peaking to a three-year high in July, with the headline inflation rate slowing to 6.1 percent in the month from 6.2 percent in August, in line with economists’ forecasts, the latest figures from the National Bureau of Statistics showed. Despite the slowdown in the annual inflation rate, food prices remained stubbornly high, surging up 13.4 percent annually and contributing 4.05 percentage points to the overall CPI.
Hong Kong’s Hang Seng index fell 1.4 percent as investors took profits in lenders and property developers after recent sharp gains.
The Australian market fell following a weak lead from Wall Street on continuing jitters over Europe’s debt crisis. Both the S&P/ASX200 and the broader All Ordinaries index ended down about 0.9 percent each, recouping some early losses. The material sector bore the brunt of the selling as metal and iron ore prices fell overnight on worries about slowing demand in China.
Mining giant BHP Billiton fell 2.1 percent, rival Rio Tinto lost 1.5 percent and Fortescue tumbled 3.4 percent. Newcrest Mining edged down 0.2 percent as gold prices fell in offshore markets overnight.
The top four banks ended modestly lower, with Westpac pacing the declines with a 0.6 percent loss. Among oil & gas producers, Woodside lost 1.3 percent, Santos fell 2.7 percent and Oil Search slipped 0.2 percent. Leighton Holdings shed 1.8 percent despite winning a contract from Iraq’s South Oil firm.
South Korea’s Kospi finished 0.7 percent higher, extending gains for a seventh consecutive session, as institutional investors including the National Pension Fund stepped up buying despite lingering European debt worries. Telecom stocks, brokerages and financials gained ground while aviation stocks fell after yesterday’s rally as the South Korean won retreated from a three-week high against the dollar, weighed down by heightened worries about European sovereign debt.
Automaker Hyundai Motor edged up 0.2 percent and its affiliate Kia Motors rose 0.4 percent. Oil refiners closed mixed, with SK Innovation climbing 3.1 percent, while S-Oil eased 0.6 percent. Among tech shares, Hynix and LG Display LCD rose around half a percent each, but Samsung Electronics lost 0.4 percent. Steelmaker POSCO declined half a percent and shipbuilder Hyundai Heavy Industries closed down a percent.
New Zealand’s benchmark NZX-50 slipped 0.1 percent after companies tied to the building sector reported weaker earnings/sales this week. Tapware maker Methven extended declines to end down 4.1 percent at a two-year low, while carpet maker Cavalier rose 0.7 percent and construction firm Fletcher Building gained half a percent. Comvita jumped 21 percent after Singapore listed international food group Cerebos Pacific made a $57 million cash offer for the honey products and healthcare company.
India’s Sensex was last trading up a percent on buying by foreign funds as well as retail investors even as government data showed India’s wholesale price index stayed above 9 percent for the 10th straight month in September, leaving room for further interest rate hikes.
Elsewhere, Indonesia’s Jakarta Composite was down 0.3 percent, Malaysia’s KLSE edged down 0.2 percent and the Taiwan Weighted lost a percent, but Singapore’s Straits Times was posting a modest 0.2 percent gain. Commodities edged higher as the euro rose against the dollar after falling in early Asian trading.