Investors avoided riskier assets after European Central Bank (ECB) President Mario Draghi said there are signs the region's recovery is losing momentum, while four economic institutes said Germany is on the edge of a recession. Concerns Europe is headed for recession resurfaced after Germany, the continent's biggest economy, reported its weakest year-on-year export growth in five years.
Germany's August export crash reinforced the IMF's message that the odds of the euro zone slipping back into recession had doubled to nearly 40%.
The ECB president Mario Draghi gave no indication of any further monetary stimulus, suggesting in a speech in Washington that governments need to do more on the fiscal side. Speaking at the Brookings Institute, he reiterated that quantitative easing would not be effective without economic reforms and warned of deflation risks.
Comments from Federal Reserve officials overnight also hurt the mood. Fed Vice Chairman Stanley Fisher and San Francisco Fed President John Williams both said they expect higher interest rates by mid-2015.
Among Asian bourses
Nikkei falls 1.15% on global growth woes
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Japanese share market declined, as the mood of investors soured amid renewed fears about global economic growth and as the dollar continued to slide against the yen. The Nikkei 225 index fell 1.15%, or 178.38 points, to 15300.55, its lowest since mid-August, and the Topix index of all first-section shares lost 1.4%, or 17.69 points, to end at 1243.09. The gauge declined 3.1% this week.
Shares of Exporters and other currency-sensitive companies extended losses after yen appreciated to upper-107 level against the greenback amid renewed fears about global economic growth. At the close of trading, the greenback was changing hands at Y107.73 versus Thursday's Y107.85 mark. A stronger yen is generally bad for Japanese exporters, as it gives them less room to cut prices on goods they sell overseas and reduces the yen value of any profits they send back home.
Honda Motor Co, a carmaker that gets 84% of sales abroad, dropped 1.4% to 3473 yen. Nissan Motor Co., which gets more than 70% of its revenue abroad, declined 1.6% to 982.7 yen. Industrial robot maker Fanuc Corp slipped 2.6% to 18175 yen, while chip testing equipment maker Advantest Corp fell 2.5% to 1283 yen. Canon Inc, the world's biggest camera maker, lost 1.2% to 3379 yen. Panasonic Corp., which gets about half its sales outside of Japan, dropped 2.5% to 1,213 yen.
Shares of social networking site operator Gree surged 8% to 810 yen after announcing a tie-up with texting/free call service app provider LINE to make and operate mobile games for Line Game.
Fast Retailing added 1.7% to 37,890 yen, after the retailer forecasted a 34% increase in annual profit to 100 billion yen for the year ending August 2015, driven by overseas growth of its Uniqlo casual-wear chain.
Minutes of September 3-4 Bank of japan meeting released today, showing the central bank expected the economy to "continue its moderate recovery trend." And, expects would likely head for a "moderate" expansion with recovery in global recovery. Many members urged to "continue to carefully monitor developments in inflation expectations, using various indicators such as surveys conducted on households, firms and economists as well as market interest rates." Meanwhile, one board member warned that "additional measures to stimulate demand carry the risk of growing financial imbalances or weakening the public's recognition of the need for structural reform."
Aussie shares dips on global economic growth fears
Australian share market finished the session steep lower, amid mounting concerns relating to global economic growth. All sectors were firmly in the red, with the energy sector and miners the hardest hit. The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index both declined by 2% to 5188.30 and 5185.70, respectively. Turnover was relatively strong with 1.98 billion shares worth of A$5.16 billion traded today. The sell-off extended the index's losses for the week to 2.4%.
Shares of material and energy companies were hardest hit, on tracking drop in crude oil and base metal prices in the international market. The decline was led by coal miners after China's announced it would levy import tariffs on coal. Whitehaven Coal was the hardest hit, shedding 8.8% to A$1.50. Woodside Petroleum and Santos fell and 2.7 and 3.5% to A$38.70 and A$12.59 respectively. Mining giant BHP Billiton erased 2.7% to A$32.31 while Rio Tinto dipped 3% to $57.26. Iron ore miner Fortescue Metals Group shed 2.7% to A$3.26.
Shares of banks and financial companies were lower, with top four lenders being major losers. Commonwealth Bank of Australia dropped 1.9% to A$74.80, ANZ Banking Group 1.9% to A$31.22 and Westpac Banking Corp 1.9% to A$32.25. National Australia Bank sank 1.7% to A$31.92, after it forecast on Thursday a 13% fall in full-year cash profit after it announced A$1.34 billion in write-downs, mainly from its British operations.
Shanghai Composite falls 0.62%
Mainland China market closed lower for the first time in eight consecutive sessions, amid profit taking after the market hit a 20-month-high yesterday. Meanwhile, concerns about slowing global economic growth intensified selloff. The benchmark Shanghai Composite index declined 14.83 points, or 0.62%, to finish at 2374.54. The benchmark index closed yesterday at 2389.37, the highest close since 20 February 2013, when it finished at 2397.18. The Shanghai index advanced 0.5% this holiday-shortened week.
Financials led the declines with China Minsheng Banking and insurers Ping An, New China Life and China Life all more than 1% each. Datong Coal Industry Co led the coal miners gains, jumping 3.3% after China re-imposed an import tax on the fuel.
China, the world's top coal importer, will levy import tariffs on the commodity after nearly a decade in its latest attempt to support ailing domestic miners. The sudden move by China to levy import tariffs of between 3% and 6% from Oct. 15 is set to hit miners in Australia and Russia -among the top coal exporters into the country.
Hang Seng dives 1.9% amid slump in global stocks
Hong Kong equity market finished the session sharply down on Friday, 10 October 2014, on tracking a drop in Wall Street overnight and other regional bourses which fell on fret slowing growth in Europe would hobble the world economy. Meanwhile, selloff in the city bourse intensified on raising fears of an escalation in demonstrations after Hong Kong's government canceled talks with pro-democracy protesters. The benchmark Hang Seng Index declined 445.99 points, or 1.9% to close at 23088.54.
China Merchants (00144) edged up 0.4% to HK$23.8 and China Shenhua (01088) nudged up 0.2% to HK$21.6. Both were the only blue-chip winners.
CR Power (00836) and Lenovo (00992) were the worst blue-chip losers. CR Power plunged 6.25% to HK$20.25 and Lenovo pounded 5% to HK$11.28.
Shares of energy companies declined after crude-oil futures entered a bear market amid speculation that demand is slowing. Brent oil prices plunged heavily yesterday to below level of US$90. CNOOC (00883) dipped 4% to HK$12.92. PetroChina (00857) fell 2.5% to HK$9.68. Sinopec (00386) slid 1.6% to HK$6.67.
HKEx (00388) softened 2.2% to HK$169.9 after former HKMA chief Joseph Yam expects the Shanghai-HK Stock Connect plan may delay. The local bourse told ET Net that preparation works on systems, technologies and markets have nearly been done, while the official opening time is left for the regulators to announce.
Sensex plummets over 300 points
Indian stock market ended lower, mirroring the losses in other Asian bourses, as weak export data from Germany sparked fears that the economic slowdown in Europe could depress global growth. At provisional finish, the BSE Sensex was lower by 1.27%, or 337.91 points, at 26299.37 points, while the National Stock Exchange's broader barometer 50-share Nifty lost 1.2%, or 96.60 points, at 7863.95 points.
Infosys shares rose by 6.5% after the company reported good Q2 result and announced a liberal 1:1 bonus issue. Infosys' consolidated net profit as per International Financial Reporting Standards (IFRS) jumped 7.3% to Rs 3096 crore on 4.5% increase in revenue to Rs 13342 crore in Q2 September 2014 over Q1 June 2014.
TD Power Systems jumped 13% after HDFC Mutual Fund on 9 October acquired 250000 shares at an average price of Rs.325, as per NSE Block deal data showed. On 8 October also HDFC Mutual fund bought 200000 shares according to BSE block deal data.
Aban Offshore rose 9.4% after the company said in a notice to BSE that it got two orders worth $182.7 million from Oil and Natural Gas Corp. (ONGC).
Elsewhere in the Asia Pacific region-- Indonesia's Jakarta Composite index shed 0.6% to 4962.96. Singapore's Straits Times index declined 1.1% at 3223.87. Malaysia's KLCI slipped 1.1% to 1808.88. New Zealand's NZX50 shed 0.78% to 5225.14. South Korea KOSPI dipped 1.24% to 1940.92. Taiwan stock market closed for holiday.
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