(1888PressRelease)
May 15, 2009 - Asian stock markets tumbled Thursday as signs of distress among U.S. consumers dashed hopes for a faster end to the worst global economic slump in generations.
Every major market was hit by sharp losses, with Japan and Hong Kong indexes down around 3 percent, as an aggressive nine-week rally that's lifted shares from Asia to the U.S. 30 percent or more started to reverse course.
The recent surge has been driven by a theme of a year-end economic renewal supported by less dismal news about the financial sector and industrial production and by government stimulus measures.
But investors saw little to pin their hopes on after the U.S. Commerce Department said overnight retail sales unexpectedly dropped in April for the second straight month. Separately, a private-sector report showed a troubling rise in home foreclosures. Together, the reports painted a picture of a U.S. consumer still loath to spend as unemployment rises and the recession drags on.
The news was unsettling because any recovery, particularly in export-driven Asian countries, could prove elusive without a rebound in demand from U.S. consumers, whose spending has been a lynchpin of the global economy.
Analysts say the markets were due for a correction after the spring surge.
"There has been detachment between equity markets and the fundamentals. We were in a period of suspended disbelief," said Stephen Yang, an analyst with Seedorf Luxman & Partners in Singapore. "The hype has passed and as reality sets in, there's only one direction that market can take and that's down,” the Seedorf Luxman & Partners analyst said.
Japan's Nikkei 225 stock average dropped 247.09 points, or 2.7 percent, to 9,093.40, and Hong Kong's Hang Seng lost 549.62points, or 3.2 percent, to 16,510. South Korea's Kospi shed 2 percent to 1,386.16.
Australia's benchmark fell 2.9 percent, Shanghai's index lost 1.8 percent and Taiwan's stock measure shed 1.8 percent.
Wall Street was similarly unnerved by the news about U.S. consumers.
The Dow Jones fell 184.22, or 2.2 percent, to 8,284.89. Broader stock indicators sank even more sharply. The Standard & Poor's 500 index fell 24.43, or 2.7 percent, to 883.92.
Wall Street futures pointed to more losses in U.S. markets. Dow futures were down 15 points, or 0.2 percent, at 8,279 and S&P 500 futures dropped 2, or 0.2 percent, to 883.30.
The slumping stock market helped pull oil prices even lower despite data showing shrinking crude supplies in the U.S. Benchmark crude for June delivery lost 66 cents to $57.36 a barrel in Asian trade. The contract shed 83 cents overnight.
In currencies, the dollar inched higher to 95.59 yen from 95.36 yen after a steep fall overnight. The euro was slightly higher at $1.3562 from $1.3559.
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