Asian shares dropped, tracking sharp declines in US and European stocks on Friday, after a jump in Spanish borrowing costs renewed concerns about Europe’s debt crisis.
The FTSE Asia Pacific index fell 0.8 per cent to 239.75.
Japan’s Nikkei 225 Stock Average fell 1.7 per cent to 9,470.64, South Korea’s Kospi Composite lost 0.8 per cent to 1,992.63 and Australia’s S&P/ASX 200 index shed 0.5 per cent to 4,302.34.
Risk aversion intensified after a surge in Spanish government bond yields pummeled US and European stocks on Friday. Investors will closely watch Spain’s debt auction on Thursday.
“Market focus is firmly back on [Europe] – peripheral spreads widened significantly on Friday …The market may be responding to any perceived lack of support for the periphery,” said strategists at Barclays Capital.
Financials were hit hardest by growing concerns about Europe. In Tokyo, Mitsubishi UFJ Financial Group slid 3.5 per cent to Y388 and Sumitomo Mitsui Financial Group shed 3 per cent to Y2,643, while Nomura Holdings dropped 2.5 per cent to Y345.
Demand sensitive technology firms were lower with Advantest tumbling 6.1 per cent to Y1,138, while Tokyo Electron fell 2.9 per cent to Y4,365.
Shipping firms also took a beating. Mitsui O.S.K. Lines slid 4.1 per cent to Y304 and Kawasaki Kisen Kaisha lost 3.6 per cent to Y161.
Resource stocks lost ground amid demand worries after weaker-than-expected economic growth figures from China on Friday.
In Sydney, Rio Tinto declined 1.2 per cent A$65.19 and BHP Billiton lost 0.5 per cent to A$34.31 in spite of talk that a private equity group was putting together a deal to buy the diamond mining businesses of both groups.
Newcrest Mining, the country’s biggest gold miner, fell 2.7 per cent to A$28.45, while smaller rival Intrepid Mines lost 5.9 per cent to A$0.72.
In Hong Kong, Angang Steel slid 3.7 per cent to HK$5.26, while Jiangxi Copper declined 1.2 per cent to HK$18.52 as copper prices fell.
Hong Kong’s Hang Seng index fell 0.6 per cent to 20,586.27 while China’s Shanghai Composite index slipped 0.1 per cent to 2,357.03.
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