Asia Shares Fall Over Concerns About Global Growth
June 10 2016 - 12:40AM
Dow Jones News
Shares in Asia fell Friday as worries resurfaced about the
uncertain direction of global economic growth.
Japan's Nikkei Stock Average was down 0.5%, Korea's Kospi lost
0.4%, and Australia's S&P/ASX 200 retreated 1%. Hong Kong's
Hang Seng Index fell 0.8%. China's mainland stock markets were
closed Friday in observance of a public holiday.
Stocks across the Asia-Pacific region generally have risen over
the past month. The MSCI Asia Pacific ex-Japan Index, a broad gauge
of shares in the region, is on track to score a fourth-straight
week of gains.
But the optimism that had propelled stocks higher across the
region seems to be dissipating, as investors become more concerned
about slowing U.S. and global economic growth. Earlier this week,
the World Bank revised its global economic growth forecast this
year to 2.4% from the 2.9% projection in January.
"After the rally for the earlier part of June, I think it has
started to come off a little bit now, particularly as the [U.S.
dollar] starts to strengthen as well," said Alex Wijaya, senior
sales trader at CMC Markets.
A stronger U.S. dollar tends to pressure commodities prices,
which then weigh on shares of commodities producers in the Asia
region. Miners and steel producers were down Friday, with BHP
Billiton Ltd. down 4.2% and Rio Tinto down 2.9% in Australia. In
Japan, Sumitomo Metal Mining fell 3.6%, and Kobe Steel dropped
4.2%.
Investors in Asia also appear unwilling to make big bets in the
uncertainty before U.K. voters decide June 23 whether Britain
should stay in the European Union, Mr. Wijaya said.
Meanwhile, falling share prices in South Korea added to
Thursday's losses. Bank of Korea officials surprised markets
Thursday by unanimously cutting interest rates to a fresh record
low of 1.25%.
In other markets, several Asian government bond yields fell this
week, a sign that investors were moving money into sovereign bonds.
For instance, the yield on South Korea's 10-year government bond
was hovering at a record low of 1.65%. Indonesia's 10-year
government bond yield was 7.58%, the lowest since late April.
The price of gold rose overnight but slid 0.3% in early Asian
trading hours to $1,270 per troy ounce.
Brent crude was recently trading at $51.84 per barrel.
Kosaku Narioka contibuted to this article.
(END) Dow Jones Newswires
June 10, 2016 00:25 ET (04:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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