October 3rd, 2011
01:16 PM GMT
Hong Kong, China (CNN) – On the first day of a new week, new month and new financial quarter, we woke to some promising data indicating a better business mood in Japan and higher factory growth in China.
But we also woke to huge falls across regional Asia markets. Greece’s admission it would now miss its deficit targets for both this year and 2012 spurred that sputter. Adding fuel to the fire of potential contagion fears, investors are concerned that the eurozone doesn’t have the will to throw in enough money to stabilize Greece.
First to the good news (which is all relative by the way)…
In Japan, business leaders seem to be seeing the proverbial glass as half full. That’s after Japan’s central bank released its quarterly Tankan survey. It measures business leader sentiment based on answers from more than 2,000 large enterprises. It’s easy enough to follow – a positive number indicates confidence, a negative number implies concern, or even fear.
In the third quarter, the Tankan number was two – a major improvement from a negative nine from the quarter before. Still, that was lower than a reading of three that economists had forecast. It’s also lower than the reading from the first quarter of the year. That pre-quake number was a six.
Out of China, Beijing released its official PMI reading for September. The purchasing manager’s index, which measures the country’s factory activity, came in at 51.2 – up from August's 50.9. A number above 50 implies growth. This second consecutive month of growth may ease some concern over a hard landing for China. China is the world’s second largest economy after the United States.
As for that bad news...
Well the writing was first on the walls across Asian stock exchanges as they welcomed the new quarter. The stock names and numbers were all in red.
Financial and resource shares were hammered on chronic fears over a Greek default and any domino effect that might have across Europe.
In Japan, the Nikkei closed down nearly 2% with Mitsubishi UFJ, Japan’s largest lender, falling nearly 3%. Exporters fell across the board led by Sony and Panasonic. Each sank more than 4%.
Here in Hong Kong, the Hang Seng was the biggest loser of the Asian bourses, closing down about 4%. Earlier in the day, it had been down by nearly 5% but it managed to pare some losses in afternoon trading.
Ping An Insurance took on the heaviest losses, losing nearly 13% of its value. Bank of China’s Hong Kong shares fell 7% while CNOOC, China’s largest offshore energy producer, fell 6%. ICBC, the world’s biggest bank by market value, slumped nearly 6% too.
Today’s hits came on the back of a horrendous third quarter for the Hang Seng. Between July and September, the bourse recorded its biggest loss in a decade, since 2001.
And in Australia, the ASX 200 rounded out the region’s losses. The index closed down nearly 3% also extending losses from Friday. Similar to the Hang Seng, the index had a miserable third quarter suffering its own biggest quarterly loss since 2008. Mining giant Rio Tinto dug 4% lower. Australia’s ‘Big four’ banks also ended deeper in the red by 3-4% with Westpac and Commonwealth Bank leading the sector’s slump.
As for the Shanghai Composite and Seoul Kospi, they were closed for their respective National Day holidays. After the tumbles across the other markets, perhaps it was just as well.
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