Investing.com - Asian stock markets were down sharply during late Asian trade on Tuesday, as appetite for riskier assets weakened amid growing concerns over political uncertainty in Spain and Italy.
During late Asian trade, Hong Kong's Hang Seng Index sank 2%, Australia’s ASX/200 Index ended down 0.5%, while Japan’s Nikkei 225 Index closed 1.9% lower.
U.S. and European equities posted sharp losses on Monday as an escalating political crisis in Spain pushed the country back in to the global spotlight.
Spanish Prime Minister Mariano Rajoy faced calls to resign from the country’s opposition leader, following allegations that he and senior officials in the ruling Popular Party received secret payments.
The yield on Spanish 10-year bonds rose to 5.46% early Tuesday, as investor concerns over the deepening political crisis mounted.
Similar-maturity Italian yields inched up to 4.50% amid uncertainty over the outcome of upcoming elections as former Prime Minister Silvio Berlusconi gained ground in opinion polls.
The news prompted investors to shun riskier assets, such as industrial commodities and stocks, and flock to traditional safe haven assets like U.S. Treasuries and the dollar.
In Tokyo, the Nikkei fell off the previous session’s 33-month high, as a strengthening yen prompted investors to lock in gains on recent outperformers.
The yen weakened to 92.23 against the greenback, retreating from Monday’s high of 93.17, which was the highest level since May 2010.
Shares in automakers Mazda and Nissan lost 3.2% and 2.1% respectively, while television maker Sharp slumped 3.5%.
Hitachi shares retreated 6.4% after the firm lowered its full-year operating profit by 13%, citing weakening demand in Europe and a slowdown in emerging markets.
A 3.1% decline in shares of index heavyweight Fast Retailing also contributed to losses.
On the upside, shares in television and home appliance maker Panasonic rose 3.9% a day after reporting an unexpected profit of JPY61 billion in the three months ended December 31, due to a weaker yen and aggressive cost-cutting measures. The stock soared by almost 17% on Monday.
Elsewhere, in Hong Kong, the Hang Seng came under heavy selling pressure, with the index moving off the previous session’s 21-month high amid concerns over the euro zone’s economic outlook.
Europe’s largest lender HSBC Holdings saw shares drop 2.5%. Shares of HSBC command a 15% weighting on the Hong Kong benchmark, making it the single largest constituent on the index.
Heavy losses in Sinopec also weighed, with the stock tumbling 6.4% after announcing a USD3.1 billion private share placement.
Meanwhile, in Australia, the benchmark ASX/200 Index was lower after the Reserve Bank of Australia kept its benchmark interest rate unchanged at 3% in February, in line with market expectations. Losses were limited as the central bank left the door open to cuts in the future.
RBA Governor Glenn Stevens said, “The inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand."
Looking ahead, European stock market futures pointed to a steady open, amid concerns over renewed political tensions in Spain and Italy.
The EURO STOXX 50 futures pointed to a loss of 0.1% at the open, France’s CAC 40 futures were flat, London’s FTSE 100 futures were little changed, while Germany's DAX futures pointed to a flat open.
The euro zone was to produce official data on retail sales later Tuesday, while Spain and Italy were to release data on service sector activity.
In the U.S. the Institute of Supply Management WAs to publish a report on service sector activity.
During late Asian trade, Hong Kong's Hang Seng Index sank 2%, Australia’s ASX/200 Index ended down 0.5%, while Japan’s Nikkei 225 Index closed 1.9% lower.
U.S. and European equities posted sharp losses on Monday as an escalating political crisis in Spain pushed the country back in to the global spotlight.
Spanish Prime Minister Mariano Rajoy faced calls to resign from the country’s opposition leader, following allegations that he and senior officials in the ruling Popular Party received secret payments.
The yield on Spanish 10-year bonds rose to 5.46% early Tuesday, as investor concerns over the deepening political crisis mounted.
Similar-maturity Italian yields inched up to 4.50% amid uncertainty over the outcome of upcoming elections as former Prime Minister Silvio Berlusconi gained ground in opinion polls.
The news prompted investors to shun riskier assets, such as industrial commodities and stocks, and flock to traditional safe haven assets like U.S. Treasuries and the dollar.
In Tokyo, the Nikkei fell off the previous session’s 33-month high, as a strengthening yen prompted investors to lock in gains on recent outperformers.
The yen weakened to 92.23 against the greenback, retreating from Monday’s high of 93.17, which was the highest level since May 2010.
Shares in automakers Mazda and Nissan lost 3.2% and 2.1% respectively, while television maker Sharp slumped 3.5%.
Hitachi shares retreated 6.4% after the firm lowered its full-year operating profit by 13%, citing weakening demand in Europe and a slowdown in emerging markets.
A 3.1% decline in shares of index heavyweight Fast Retailing also contributed to losses.
On the upside, shares in television and home appliance maker Panasonic rose 3.9% a day after reporting an unexpected profit of JPY61 billion in the three months ended December 31, due to a weaker yen and aggressive cost-cutting measures. The stock soared by almost 17% on Monday.
Elsewhere, in Hong Kong, the Hang Seng came under heavy selling pressure, with the index moving off the previous session’s 21-month high amid concerns over the euro zone’s economic outlook.
Europe’s largest lender HSBC Holdings saw shares drop 2.5%. Shares of HSBC command a 15% weighting on the Hong Kong benchmark, making it the single largest constituent on the index.
Heavy losses in Sinopec also weighed, with the stock tumbling 6.4% after announcing a USD3.1 billion private share placement.
Meanwhile, in Australia, the benchmark ASX/200 Index was lower after the Reserve Bank of Australia kept its benchmark interest rate unchanged at 3% in February, in line with market expectations. Losses were limited as the central bank left the door open to cuts in the future.
RBA Governor Glenn Stevens said, “The inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand."
Looking ahead, European stock market futures pointed to a steady open, amid concerns over renewed political tensions in Spain and Italy.
The EURO STOXX 50 futures pointed to a loss of 0.1% at the open, France’s CAC 40 futures were flat, London’s FTSE 100 futures were little changed, while Germany's DAX futures pointed to a flat open.
The euro zone was to produce official data on retail sales later Tuesday, while Spain and Italy were to release data on service sector activity.
In the U.S. the Institute of Supply Management WAs to publish a report on service sector activity.