Emerging markets were also been shaken with fears of capital flight as the U.S. central bank pulled back again on its massive stimulus spending, widely credited for buoying global stock markets.
The MSCI Asia Pacific Index lost 2.7% to 130.28, heading for the lowest close since Aug. 30. The measure dropped 4.6% in January for its worst start to a year since 2009 as economic data from China missed estimates and emerging-market currencies slumped.
Regional shares got a weak lead from offshore after US stocks saw their worst start to February since 1933 after disappointing manufacturing data heightened concern about the economy before Friday's monthly jobs report. US stocks fell more than 2% on Monday after a surprisingly weak US manufacturing report sparked another round of selling amid concerns about the strength of the global economy.
Among Asian bourses, Australian stocks stumbled sharply today, wiping off more than A$26 billion of the market value. All sectors finished in the red. The benchmark S&P/ASX 200 index dropped 90.80 points to 5097.10, while the broader All Ordinaries sank 87.80 points to 5114.10.
Shares of Australian materials and resources companies dropped on tracking weakness in base metal prices in the international market. Base metal prices fell up to 1.8% on the London Metal Exchange on Monday with aluminium leading the declines. But tin bucked the trend, up 0.5%.
Resources giant BHP Billiton skidded 2.6% to A$35.50, while rival Rio Tinto shed 1.9% to A$64.11. Junior iron ore miner Fortescue Metals Group dropped 1.5% to A$5.19. Alumina shares dropped 3.14% to A$1.24 and BlueScope Steel 2.9% to A$5.34.
Gold miners in Sydney were among the few winners, as a 1.6% gain for Comex gold futures sent Newcrest Mining 4.74% up at A$10.16, Evolution Mining 4.07% up at A$0.64 and Kingsgate Consolidated 3.69% up at A$1.13.
Engineering firm Downer EDI dropped 1.2% to A$4.80 after announcing half-year results. Online property classifieds company REA Group was up 5% to A$43.78 after delivering a 37% rise in half-year net profit.
Australian dollar strengthened from yesterday's closure against greenback and other major currencies on Tuesday after Australia's central bank indicated it's no longer leaning toward cutting interest rates. The Reserve Bank of Australia kept its key interest rate at a record low 2.5%. The RBA gave forward guidance stating the most prudent course is likely to be a period of stability in interest rates.
Around late afternoon, the Australian dollar was quoted at 0.8892 against US dollar, 0.6577 against the euro, 90.09 against the Japanese yen, 0.5441 against the British pound, 0.8036 against Swiss franc, 0.9890 against Canadian dollar, and 6.9031 against the HK dollar.
In Japan, Japanese stocks closed at its lowest levels in four months after the yen jumped to a two-month high against both the U.S. dollar and euro. The benchmark Nikkei-225 index retreated 610.66 points to 14008.47, while the Topix index of all first-section shares tanked 57.05 points to 1139.27.
The loss was the worst in a single day since June 13, leaving the Nikkei-225 index down 14% for the year, and currently the worst performer in the world. On Monday the index slipped 2.0% Monday, a fall that formally put it into a correction, defined as a fall of at least 10% from a recent closing high.
Market sentiments in Tokyo were hammered primarily by yen appreciation against the major currency baskets. In forex trading, the dollar rose to 100.8 yen from 100.94 yen in New York Monday afternoon and well down from 102.31 yen in Tokyo at the start of the week. A strong currency makes Japanese-made exports more expensive overseas and erodes repatriated earnings.
Export related stocks hammered badly. Suzuki Motor and Mitsubishi Electric were some of the biggest losers, down 6% each while Sharp lost 8.3%. Panasonic and Toyota Motor lost 7 and 6%, respectively ahead of posting earnings later in the day. Mitsubishi UFJ Financial declined 3.6% despite a 48% rise in group-profit for the nine-months through December.
In South Korea, shares in Seoul market extended losses to hit fresh five-month lows as Asia-wide pessimism overshadowed upbeat economic data. The benchmark KOSPI index lost 1.72% to 1886.85. Annual consumer price inflation in January was unchanged from the previous month thanks to stabilizing agricultural product prices.
Among Seoul blue-chips, Hyundai Motor lost 2.3% after sales of automakers dipped 2.1% in January from a year earlier while Samsung fell nearly 2%.
In Hong Kong, shares of the HK market stumbled on the first trading session of the week, as risk off selling across the board after weaker-than-expected manufacturing growth from the U.S. to China fueled a global equities rout on concern about the strength of the global economy. The benchmark Hang Seng Index provisionally finished 637.65 points higher at 21397.77. The local market closed on Friday to Monday for Chinese New Year holidays.
Among the HK blue chips, five stocks rose and 44 fell, with one stock remaining steady. Lenovo (00993) plunged 16.4% to HK$8.41 after it announced plan to acquire Motorola Mobility. It was the worst performing blue chip today.
Shares of utility companies closed modest higher. Power Assets (00006) rose 1.4% to HK$59.1. CLP (00002) edged up 0.4% to HK$58.85.
Macau gaming players were softer. Wynn Macau (01128) nudged down 0.6% to HK$32.95. Galaxy Ent (00027) retreated 6.3% to HK$71.5.
Shares of tech companies declined, with PC maker Lenovo Group down 16.40% to HK$8.41 after the company agreed to buy Google Inc.'s Motorola handset business for $2.91 billion, while Japan's NHK reported the firm may also start a joint-venture with Sony Corp. Lenovo recently suffered ratings cuts to its shares from Morgan Stanley and Jeffries. Other tech stocks also retreated, with software developer Kingsoft Corp. sank 4.72% to HK$24.25 and Tencent Holdings 6.07% to HK$510.50.
Metal & mining shares declined, with Lingbao Gold drop 2.88% to HK$1.35 as the company expected to see substantial losses in 2013 due to a sharp decline in gold prices. Zijin Mining Group Co fell 4.17% to HK$1.16. Aluminum Corporation of China dropped 4.30% to HK$2.67 and Jiangxi Copper Co. lost 2.56% to HK$13.68.
In India, key benchmark indices finished almost unchanged after seeing intense intraday volatility throughout the day. Strong intraday recovery helped indices settle above the psychological levels following an initial setback triggered by weakness in Asian stocks and steep losses for US stocks on Monday, 3 February 2014. The market breadth, indicating the overall health of the market turned positive from negative in late trade. Intraday recovery in European shares and gains in US index futures which pointed to a recovery in US stocks later in the global day aided intraday recovery on the domestic bourses after the barometer index, the S&P BSE Sensex, hit its lowest level in nearly 17 weeks below the psychological 20,000 level.
The S&P BSE Sensex was up 2.67 points or 0.01% to 20,211.93, its highest closing level since 31 January 2014. The index rose 46.26 points at the day's high of 20,255.52 in late trade. The index tumbled 246.14 points at the day's low of 19,963.12 in early trade, its lowest level since 9 October 2013.
The Sensex is down 301.92 points or 1.47% in the month so far (till 4 February 2014). The Sensex had lost 656.83 points or 3.1% in January 2014. Metal stocks extended Monday's losses triggered concerns of slowdown in Chinese economy. China is the world's largest consumer of copper and aluminum. Sesa Sterlite (down 0.78%), Steel Authority of India (Sail) (down 2.82%), JSW Steel (down 0.93%), Hindustan Copper (down 0.25%), NMDC (down 2.95%), Hindustan Zinc (down 1.08%) and Hindalco Industries (down 0.72%) edged lower. Tata Steel rose 0.47%.
Tech Mahindra rose 0.54%. The company after market hours today, 4 February 2014 reported 40.6% surge in consolidated profit after tax (PAT) to Rs 1010 crore on 2.7% rise in revenue to Rs 4899 crore in Q3 December 2013 over Q2 September 2013. Operating profit (EBITDA) rose 2.3% to Rs 1136 crore in Q3 December 2013 over Q2 September 2013.
Financial Technologies (India) (FTIL) galloped 4.99% to Rs 289.10. FTIL announced during trading hours today, 4 February 2014, that the transaction, relating to sale of Singapore Mercantile Exchange (SMX) and Singapore Mercantile Exchange Clearing Corporation (SMX CC) by Financial Technologies Singapore (FTSPL), Singapore to ICE Singapore Holdings (ICE) has been completed.
Tata Motors gained 2.82% to Rs 346.10, with the stock reversing intraday fall in volatile trade. The stock hit a high of Rs 346.90 and low of Rs 331.05. Tata Motors on Monday, 3 February 2014, unveiled two all-new cars -- the classy sedan, ZEST and the sporty, dynamic premium hatchback, BOLT that look to redefine the passenger car market with new design aesthetics, segment-defining drive experience and high-tech Infotainment system, the auto major said in a statement.
Elsewhere in the Asia Pacific region, New Zealand's NZX50 index sank 0.97%. Malaysia's KLSE Composite shed 1.4%. Indonesia's Jakarta Composite index shed 0.78%. Singapore's Straits Times index fell 0.84%. Markets in mainland China, Taiwan and Vietnam were closed for holidays.
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