Asian markets tumble as worries about US consumers halt rally; Tokyo, Hong Kong off 3 percent
On Wednesday May 13, 2009, 11:54 pm EDT
HONG KONG (AP) -- Asian stock markets tumbled Thursday as signs of distress among U.S. consumers dashed hopes of a quicker recovery in the world's largest economy.
Every major market was hit by sharp losses, with Japan and Hong Kong indexes down around 3 percent, as an aggressive nine-week rally started to reverse course.
The recent surge has been driven by a theme of economic renewal supported by less dismal news about the financial sector, 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.
The number were unsettling because any recovery -- particularly in export-driven Asian countries -- could prove elusive without a rebound in demand from the U.S., whose consumers are 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 Kirby Daley, senior strategist at Newedge Group in Hong Kong. "The hype has passed and as reality sets in, there's only one direction that market can take and that's down."
Japan's Nikkei 225 stock average dropped 259.42 points, or 2.8 percent, to 9,081.07, and Hong Kong's Hang Seng lost 565.58 points, or 3.3 percent, to 16,494.04. South Korea's Kospi shed 2.1 percent to 1,385.37.
Australia's benchmark fell 3.2 percent, Shanghai's index lost 1.8 percent and Taiwan's stock measure shed 1.3 percent.
Wall Street was similarly unnerved by 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.
The slumping stock market helped drag oil prices even lower despite data showing shrinking crude supplies in the U.S. Benchmark crude for June delivery lost 34 cents to $57.68 a barrel in Asian trade. The contract shed 83 cents overnight.
In currencies, the dollar inched higher to 95.47 yen from 95.36 yen after a steep fall overnight. The euro was slightly lower at $1.3556 from $1.3559.
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