Asian markets sank further in holiday-thinned trade yesterday, following another global sell-off caused by anxieties over emerging markets and further disappointing manufacturing data out of China.
The euro edged up against the yen after falling in New York in response to weak eurozone inflation figures that added to fears of deflation in the currency bloc.
Tokyo fell 1.98 percent, or 295.40 points, to 14,619.13 and Seoul slipped 1.09 percent, or 21.19 points, to 1,919.96.
Sydney closed flat, edging down 2.1 points to 5,187.9 while Wellington eased 0.51 percent, or 25.08 points, to 4,849.50.
However, Bangkok was up 1.10 percent despite chaotic weekend elections that saw thousands of polling stations closed by opposition protestors following weeks of anti-government demonstrations.
Taipei, Shanghai, Hong Kong, and Kuala Lumpur were closed for the Lunar New Year holiday.
Global equities tanked last week after the US Federal Reserve said it would further cut its stimulus program, sparking fears of a flight of capital from developing nations while also sending their currencies falling against the US dollar.
That in turn was fueling buying of the yen, which was being viewed as safe haven, and that was helping send regional stocks lower, Toyo Securities Co strategist Hiroaki Hiwada said.
The stock fall in New York was also weighing on investor sentiment, he said.
“There is little good news to trade on. Maybe by next week, people will start to buy shares back,” Hiwada said.
On Friday the Dow sank 0.94 percent, the S&P 500 fell 0.65 percent and the NASDAQ lost 0.47 percent.
Earlier in Europe the FTSE 100 in London ended 0.43 percent lower, Frankfurt’s DAX 30 dropped 0.71 percent and the CAC 40 in Paris slid 0.34 percent.
The euro was little changed at US$1.3485. The US dollar rose to ￥102.23 from ￥101.96 late on Friday, but is down from about ￥105 at the beginning of the year.
“There’s still some nervousness about emerging markets,” investment adviser Christopher Macdonald told Dow Jones Newswires. “People are wondering if the jitters we saw last month are a sign of some bigger dislocation in the market.”
Adding to the downbeat outlook was official data from China pointing to a slowdown in manufacturing activity in the world’s second-largest economy and key driver of global growth.
The purchasing managers’ index (PMI) fell to 50.5 last month from 51 in December last year and 51.4 in November, the Chinese National Bureau of Statistics and the China Federation of Logistics and Purchasing said on Saturday.
Any figure above 50 indicates expansion while anything below signals contraction.
The news came days after banking giant HSBC’s China PMI came in at a six-month low of 49.5.
“There is no doubt that the surging money-market rates have added uncertainty and dampened industry confidence,” said Liu Li-gang (劉利剛), chief Greater China economist at Australia & New Zealand Banking Group Ltd in Hong Kong.
The Chinese central bank will “have to strike a delicate balance” between cracking down on shadow banking and maintaining financial stability, Liu said.
A separate report released yesterday on the non-manufacturing sector also showed a deterioration, with that PMI falling to 53.4 last month from 54.6 in December last year.