(Adds information, quotes, updates/adds market levels)
By Shri Navaratnam and Ga-Woon Philip Vahn
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--Asian stock markets were mostly lower Wednesday on global growth concerns, with a strong yen weighing on Tokyo shares, while the Shanghai market struggled as investors fretted about the possibility of further tightening measures from Beijing.
Japan's Nikkei Stock Average fell 0.2%, Australia's S&P/ASX 200 fell 0.5%, while South Korea's Kospi Composite was 1.2% lower. The Shanghai Composite Index fell 0.3%, Hong Kong's Hang Seng Index fell 0.9%, and India's Sensex gave up 0.2%.
Dow Jones Industrial Average futures were down 19 points in screen trade.
Sparse early buying interest in some regional markets was quickly overwhelmed by sellers as investors took a dim view of Tuesday's downbeat comments on the U.S. economy from Federal Reserve Chairman Ben Bernanke and Wall Street's drop for the fifth consecutive day.
"The data, particularly in the U.S., have pointed to a substantial slowing in growth over the last two months," said Dominic Wilson at Goldman Sachs in a note. "We are tilted a little negatively in equities for the first time this year, and we are not taking strong views on overall risk/cyclical direction yet," he added.
In Tokyo, a firmer yen and domestic growth concerns sapped buying interest.
"With U.S. Fed Chairman Ben Bernanke expressing a weak outlook on the U.S. economy, there is a tendency for the dollar to trend lower," said Yumi Nishimura, a senior market analyst at Daiwa Securities.
The yen rose to a fresh one-month high against the U.S. dollar in early Wednesday trade, with the greenback slipping to Y79.84; a strong local currency is an additional worry for Japan's export-led economy, which is struggling to recover from the devastating March 11 natural disasters.
Nintendo fell 6.2% as investors were disappointed by the lack of positive surprises in the company's newly introduced successor to its Wii videogame console. Hiroaki Osakabe, a fund manager at Chibagin Asset Management, said there were no 'landmark' new features to the new console. "With earnings expected to be quite weak, there is no reason to buy this stock now before confirming the (first quarter) results."
Tokyo Electric Power was off 6.5% and Chubu Electric Power lost 2.4% on a Nikkei report that all of Japan's nuclear plants may stay idle for some time.
The Shanghai market was stymied as investors were wary about further interest rate hikes by the People's Bank of China.
"The market expected interest rate hikes before the holiday weekend. No hikes materialized, but the expectations for increases remain," said China Minzu Securities analyst Wang Bo. In an effort to tame rising inflation, the PBOC has raised banks' reserve requirement ratios five times this year and lifted interest rates on deposits and loans four times since October last year.
Recent outperformers succumbed to profit-taking with China Cosco down 0.4%, Zijin Mining off 0.6% and PetroChina 0.5% lower.
In Sydney and Seoul, worries about the global economy hurt sentiment, with cyclycal stocks taking a beating.
Energy stocks were leading broad-based declines in Australia ahead of the outcome of the OPEC meeting, which concludes Wednesday. Woodside, Origin, Santos, Oil Search and Paladin were down 1.1%-4.8%.
Hyundai Heavy Industries tumbled 6.5% in Seoul on mounting speculation the world's largest shipbuilder by order value may submit a bid for a stake in Hynix Semiconductor, raising concerns over its cost burden in potentially buying into a non-shipbuilding business. A person familiar with the situation on Wednesday told Dow Jones Newswires that Hyundai Heavy may submit a bid for the 15% stake in Hynix held by the chipmaker's creditors.
Elsewhere in the region, Taiwan's main index lost 0.2%, Singapore's Straits Times Index fell 0.4%, Thailand shares fell 1.5%, while New Zealand's NZX-50 was up 0.6%.
In foreign exchange markets, ongoing worries about a slowdown in global economic growth--further underlined by Bernanke's gloomy assessment on the U.S. economy-- and weak regional equities weighed on the risk-sensitive euro. The safe-haven yen, however, benefited against the dollar from the risk-off tone.
Investors were also keeping a close watch on the European Central Bank meeting, which is expected to signal rate hikes in coming months. "Any hint of a July hike could see the euro continue its remarkable rebound," said Tim Waterer, senior dealer at CMC Markets in Sydney. "It is worth remembering that only a couple of weeks ago Euro was briefly trading at sub-$1.40 and now it could be heading for a test of $1.50 in the coming months courtesy of a growing yield differential over its U.S. counterpart."
The euro was at $1.4662 against the greenback, from $1.4690 late Tuesday in New York, and at Y117.21 against the yen, from Y117.65. The dollar was buying Y79.91, from Y80.10.
Spot gold was at $1,544.60 per troy ounce, off 10 cents from its New York settlement on Tuesday. July Nymex crude oil futures were up 53 cents at $99.62 per barrel on Globex.
-Shri Navaratnam, Dow Jones Newswires; +65-6415-4142; shri.navaratnam@dowjones.com
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(END) Dow Jones Newswires
June 08, 2011 01:07 ET (05:07 GMT)2011 Dow Jones & Company, Inc.
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