Asian stocks on Friday posted their steepest slump in 10 months as Britain’s vote to leave the EU stunned investors, raising concern that a divided Europe would further damage global growth.
The MSCI Asia Pacific Index fell 3.7 percent to 125.23 on Friday in Hong Kong, as the UK voted to quit the EU after more than four decades in a rejection of the continent’s postwar political and economic order, prompting British Prime Minister David Cameron to resign and pressuring markets around the world.
“Fear is normally easier to profit from than greed. This is what we are seeing today,” said Ang Kok Heng, Kuala Lumpur-based chief investment officer at Phillip Capital Management Bhd.
The regional index was down by a milder 0.9 percent from 126.34 the previous week.
In Taipei, the TAIEX slid 2.3 percent to 8,476.99 on Friday, as investors scrambled to dump their holdings following the UK vote on Thursday, dealers said.
The weighted index was also down 1.1 percent from the previous week’s 8,568.08.
Selling was seen across the board, with large cap stocks, such as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), and IC designer MediaTek Inc (聯發科), shedding 3.05 percent and 1.97 percent to NT$159 and NT$223.50 respectively, Taiwan Stock Exchange (TWSE) data showed.
Financial stocks also plunged, with Fubon Financial Holding Co (富邦金控) falling 4.02 percent to NT$38.20, and Cathay Financial Holding Co (國泰金控) dropping 3.32 percent to NT$36.40.
“Where the local main board will go will depend on whether foreign institutional investors will continue to sell aggressively,” Ta Ching Securities Co (大慶證券) analyst Andy Hsu (許博傑) said.
TWSE data showed that foreign institutional investors sold a net NT$13.04 billion in shares on the main board on Friday.
Japan’s TOPIX plunged 7.3 percent, the most in Asia. The gauge is already down 22 percent to date this year. Brexit fear has pummeled Japanese stocks more than other markets amid concern a vote to leave the EU could push investors into haven assets such as the yen. The currency soared past ￥100 per US dollar for the first time since November 2013. Morgan Stanley had warned that losses on the TOPIX would be bigger than elsewhere in Asia should Britain opt to leave the EU.
Toyota Motor Corp, Japan’s biggest company, plunged 8.7 percent in its worst day since the depths of the global financial crisis. Tata Motors Ltd tumbled 9.9 percent in Mumbai, dragging India’s S&P BSE SENSEX to the steepest drop since Feb. 11. Tata Motors, whose Jaguar Land Rover unit gets a quarter of its sales from Europe, was the SENSEX’s worst performer. Tata Steel Ltd, which has plants in the UK and the Netherlands, lost 9 percent.
The Hang Seng Index lost 2.9 percent, paring declines of as much as 5.8 percent. HSBC Holdings PLC, which gets a third of its revenues from Europe and has the second-biggest weighting on the Hong Kong stock gauge, sank 6.6 percent. South Korea’s KOSPI tumbled the most since May 2012 and Australia’s S&P/ASX 200 Index fell 3.2 percent. Volumes on Friday were at least 63 percent above average in Japan, Hong Kong and Australia.
Gauges of equity volatility across Asia surged. The HSI Volatility Index in Hong Kong rose 13 percent, while the Nikkei Stock Average Volatility Index climbed 17 percent. The KOSPI 200 Volatility Index gained 24 percent.
“I’m doing nothing. I’m paralyzed in fear, curled up fingers and toes like ina horror movie,” Alan Richardson, a Hong Kong-based money manager at Samsung Asset Management Ltd, said by e-mail. “I was very confident it will be IN.”
Elsewhere in Asia, New Zealand’s S&P/NZX 50 Index slid 2.3 percent, Vietnamese shares fell 1.8 percent, and equity gauges in Indonesia, Thailand and the Philippines dropped at least 1.3 percent.
Additional reporting by staff writer, with CNA
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