HONG KONG (AFP) – Asian markets mostly slipped Wednesday following a US and European sell-off that came in response to more weak German data and the IMF’s decision to cut its growth forecast for the global economy.
The dollar clawed back some of the losses it suffered in New York but with caution taking over among traders it is struggling to return to the six-year highs above 110 yen it touched last week.
Tokyo fell 1.19 per cent, or 187.85 points, to finish at 15,595.98, while Seoul lost 0.39 per cent, or 7.66 points, to 1,965.25 and Sydney eased 0.81 per cent, or 42.9 points, to 5,241.3.
In the afternoon Hong Kong broke a three-day winning streak to sit 0.72 per cent lower.
However, Shanghai, which has been closed since Wednesday for the Golden Week holiday, ended 0.80 per cent higher, adding 18.92 points to 2,382.79.
Shares across Europe and on Wall Street sank Tuesday after the International Monetary Fund lowered its 2014 global growth estimate – to 3.3 per cent from 3.4 per cent tipped in July – warning of stagnation in advanced economies. It also forecast 2015 growth of 3.8 per cent, against 4.0 per cent previously.
It warned that the world economy faced increased risks from the crisis in Ukraine, ongoing Middle East woes and the spread of Ebola. The damaged inflicted by the economic crisis that began in 2008 is “proving tougher to resolve”, especially in Europe, it added.
The Fund also slashed its outlook for Japan this year from 1.6 per cent growth to 0.9 per cent, underscoring the damage of April’s sales tax hike, while it left its forecast for China unchanged but warned of “near-term growth risks”, especially in the real estate sector.
On Wall Street, the Dow shed 1.60 per cent, the S&P 500 fell 1.51 per cent and the Nasdaq lost 1.56 per cent.
Earlier London’s FTSE 100 ended 1.04 per cent lower, the CAC 40 in Paris tumbled 1.81 per cent and Frankfurt’s DAX slipped 1.34 per cent.
Adding to the selling pressure was data showing industrial production in Germany, the eurozone’s biggest economy, slumped 4.0 per cent in August. That came a day after statistics office Destatis said the country’s factory orders dived 5.7 per cent in the same month.