Investing.com - Asian stock markets posted sharp losses during late Asian trade on Thursday, as market sentiment was weighed by reduced expectations for further easing from the Federal Reserve.
Investors also shed riskier assets ahead of data expected to show a deepening slowdown in Chinese economic growth.
During late Asian trade, Hong Kong's Hang Seng Index tumbled 1.65%, Australia’s ASX/200 Index fell 0.7%, while Japan’s Nikkei 225 Index dropped 1.5%.
In the minutes of its June policy-setting meeting released Wednesday, the Fed signaled that a further economic slowdown would bring growing support among policy makers for additional steps to spur growth.
While a few board members said the central bank should ease policy to boost the economy, others indicated that more action could be warranted if growth slows, risks intensified or if inflation seemed likely to fall “persistently” below their goal.
Meanwhile, market players were looking ahead to Chinese second quarter growth figures due out on Friday, to gauge whether China is a heading towards a hard or a soft landing.
A deeper slowdown in China would impair a global expansion that is already faltering because of the ongoing debt crisis in the euro zone.
Fears over the global economic outlook intensified after official data Tuesday showed that Chinese exports and imports in June slowed from the previous month, as weakening global demand weighed.
Elsewhere, markets remained jittery after Spanish Prime Minister Mariano Rajoy announced on Wednesday EUR65 billion of new austerity measures, in an effort to meet new budget-deficit targets agreed with euro zone partners.
Market analysts warned that the fresh austerity measures were likely to drag Spain’s economy deeper in to a recession.
The gloomy outlook for global growth prompted investors to shed riskier assets, such as stocks and commodities, and flock to safe-haven assets like the U.S. dollar and Treasuries.
In Tokyo, the Nikkei came under pressure after the Bank of Japan refrained from adding monetary stimulus following its two-day policy setting meeting.
While the central bank increased its asset-purchase program by JPY5 trillion to JPY45 trillion, it also cut its loan facility program by the same amount to JPY25 trillion.
The BoJ also kept its benchmark interest rate unchanged between zero and 0.1 percent and monthly bond purchases at JPY1.8 trillion.
Shares in exporters were weaker, as the yen rallied against its major counterparts following the announcement.
Consumer electronics giant Sony lost 2.35%, while automakers Honda and Nissan fell 2.7% and 2.1% respectively.
Meanwhile, in Hong Kong, the Hang Seng was set to close at its lowest level since October, amid growing fears over a hard landing in China.
Shares in the financial sector were lower, with China Construction Bank down 2.85%, Industrial and Commercial Bank of China shares slumped 2.2$%, while index heavyweight HSBC Holdings declined 1.1%.
Elsewhere, shares in Australia were dragged lower after data showed that the nation’s employers slashed 27,000 in June, defying expectations for a modest increase of 300 jobs.
The nation’s unemployment rate ticked up for a second month to 5.2% from 5.1%.
Looking ahead, the outlook for European stock markets was lower, as the lack of substantial progress in tackling the euro zone’s sovereign debt crisis continued to weigh on market sentiment.
The EURO STOXX 50 futures pointed to a loss of 0.5% at the open, France’s CAC 40 futures declined 0.5%, London’s FTSE 100 futures shed 0.5%, while Germany's DAX futures pointed to a drop of 0.55% at the open.
Later in the day, the euro zone was to produce official data on industrial production, while the U.S. was to release government data on unemployment claims and official data on import prices.
Investors also shed riskier assets ahead of data expected to show a deepening slowdown in Chinese economic growth.
During late Asian trade, Hong Kong's Hang Seng Index tumbled 1.65%, Australia’s ASX/200 Index fell 0.7%, while Japan’s Nikkei 225 Index dropped 1.5%.
In the minutes of its June policy-setting meeting released Wednesday, the Fed signaled that a further economic slowdown would bring growing support among policy makers for additional steps to spur growth.
While a few board members said the central bank should ease policy to boost the economy, others indicated that more action could be warranted if growth slows, risks intensified or if inflation seemed likely to fall “persistently” below their goal.
Meanwhile, market players were looking ahead to Chinese second quarter growth figures due out on Friday, to gauge whether China is a heading towards a hard or a soft landing.
A deeper slowdown in China would impair a global expansion that is already faltering because of the ongoing debt crisis in the euro zone.
Fears over the global economic outlook intensified after official data Tuesday showed that Chinese exports and imports in June slowed from the previous month, as weakening global demand weighed.
Elsewhere, markets remained jittery after Spanish Prime Minister Mariano Rajoy announced on Wednesday EUR65 billion of new austerity measures, in an effort to meet new budget-deficit targets agreed with euro zone partners.
Market analysts warned that the fresh austerity measures were likely to drag Spain’s economy deeper in to a recession.
The gloomy outlook for global growth prompted investors to shed riskier assets, such as stocks and commodities, and flock to safe-haven assets like the U.S. dollar and Treasuries.
In Tokyo, the Nikkei came under pressure after the Bank of Japan refrained from adding monetary stimulus following its two-day policy setting meeting.
While the central bank increased its asset-purchase program by JPY5 trillion to JPY45 trillion, it also cut its loan facility program by the same amount to JPY25 trillion.
The BoJ also kept its benchmark interest rate unchanged between zero and 0.1 percent and monthly bond purchases at JPY1.8 trillion.
Shares in exporters were weaker, as the yen rallied against its major counterparts following the announcement.
Consumer electronics giant Sony lost 2.35%, while automakers Honda and Nissan fell 2.7% and 2.1% respectively.
Meanwhile, in Hong Kong, the Hang Seng was set to close at its lowest level since October, amid growing fears over a hard landing in China.
Shares in the financial sector were lower, with China Construction Bank down 2.85%, Industrial and Commercial Bank of China shares slumped 2.2$%, while index heavyweight HSBC Holdings declined 1.1%.
Elsewhere, shares in Australia were dragged lower after data showed that the nation’s employers slashed 27,000 in June, defying expectations for a modest increase of 300 jobs.
The nation’s unemployment rate ticked up for a second month to 5.2% from 5.1%.
Looking ahead, the outlook for European stock markets was lower, as the lack of substantial progress in tackling the euro zone’s sovereign debt crisis continued to weigh on market sentiment.
The EURO STOXX 50 futures pointed to a loss of 0.5% at the open, France’s CAC 40 futures declined 0.5%, London’s FTSE 100 futures shed 0.5%, while Germany's DAX futures pointed to a drop of 0.55% at the open.
Later in the day, the euro zone was to produce official data on industrial production, while the U.S. was to release government data on unemployment claims and official data on import prices.