Stocks across the Asia region plunging in trading on Monday as worries grow over slowing growth in China and signs the U.S. will ease back on stimulus.
The yen trades near a seven-week high with Japan’s Nikkei slumped 2.7%, falling below 15,000 for the first time since mid-November.
Elsewhere in Asia, Hong Kong’s Hang Seng Index sank 2.1%, South Korea’s Kospi dropped 1.7% and Indonesia’s JSX dived 2.8%.
Attention is focusing on Beijing to see how it will resolve a troubled loan involving a major Chinese bank and a shadow lender that is due to mature this Friday. A default could batter confidence in China’s loosely regulated shadow-banking sector.
The declines on Monday extended a poor start for Asian markets in 2014, with a number of markets already deep in the red for the year. Hong Kong’s Hang Seng Index is 5.8% lower year-to-date and South Korea’s Kospi is down 5.1%. On the mainland, the Shanghai Composite Index dropped 1%.
Stock losses in Japan were broad-based, with industrial major Komatsu Ltd. lower by 3.4%, Sony Corp. down 3.2%, and Japan Airlines Co. off 2.3%.
Japanese companies are slated to begin rolling out quarterly results this week. A Nikkei newspaper report Monday said a weaker yen will be one of the factors to contribute to record operating profits at Subaru-brand vehicle maker Fuji Heavy Industries Ltd., Hino Motors Ltd. and Isuzu Motors Ltd. for the nine months ended Dec. 31.
But shares of the auto makers were caught up in the selloff, with Hino losing 4.2%, Fuji Heavy giving up 3% and Isuzu shedding 1.4%.
Hong Kong stocks saw a broad selloff. Shares declined across the board, with Chinese energy and casino stocks among the biggest losers.
China Renewable Energy Investment Ltd. shed 9.2%, China High Speed Transmission Equipment Group lost 7.7%, and China Oilfield Services Ltd gave up 4.7%.
Casino stocks continued their fall. Both Melco Crown Entertainment Ltd. and Wynn Macau Ltd. slumped 8.3%, while MGM China Holdings Ltd. retreated 7.8%.
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