Asia markets take beating after US data

A businessman walks past a share prices board in Tokyo. (File photo: AFP/Yoshikazu TSUNO)

HONG KONG: Asian markets tumbled Thursday (Oct 16), led by another huge sell-off in Tokyo, following a disappointing set of US data that fuelled fears about the world's top economy.

Traders took their lead from New York and Europe, where equities and the dollar sank, while oil prices are rooted at multi-year lows. Tokyo plunged 2.36 per cent as exporters were stunned by the stronger yen, while Sydney fell 1.16 per cent and Seoul lost 0.76 per cent.

The US Commerce Department said retail sales fell in September for the first time in seven months, total retail and food services sales dropped 0.3 per cent from August, slightly more than the 0.2 per cent expected on average by analysts. Also Wednesday the Labor Department said US producer prices fell last month for the first time since August 2013. Analysts had expected a rise.

The news led to fears that the US economy, which has been showing strong signs of recovery this year, may be feeling the effects of a torpid eurozone, a slowdown in China and stuttering Japanese growth. The Dow fell 1.06 per cent - although it had been more than two percent lower earlier in the day - the S&P 500 shed 0.81 per cent and the Nasdaq eased 0.28 per cent.

In Europe London's FTSE 100 tumbled 2.83 per cent to its lowest close since June 2013, while Frankfurt's DAX 30 lost 2.87 per cent and the Paris CAC 40 sank 3.63 per cent. Wednesday's US figures also dampened any chance the Federal Reserve will lift interest rates from record lows any time soon, putting further downward pressure on the dollar.

The greenback just two weeks ago was at multi-year highs against other currencies in anticipation that the Fed would move more quickly than other central banks to tighten monetary policy. In early Asian trade it was at 106.00 yen, compared with 105.91 yen in New York but sharply down from 107.33 yen in Tokyo earlier Wednesday. At the start of the month had broken 110 yen for the first time in six years.

The euro was also boosted against the dollar and fetched US$1.2832 Thursday, up from US$1.2834 in New York and much stronger than the US$1.2702 earlier Wednesday in Tokyo. The single currency was also at 136.05 yen against 135.94 yen in New York.

Oil prices extended their losses as investors fret about weak demand caused by the downbeat economic outlook and the huge increase in supplies coming to the market. US benchmark West Texas Intermediate for November delivery was down 94 cents at a two-year low of US$80.83 a barrel in mid-morning trade and Brent crude tumbled 59 cents to US$83.19, a four-year low. Gold was at US$1,224.00 an ounce against US$1,233.25 late Tuesday.