Asian shares fell Monday as concerns about slumping corporate profits and the still-uncertain outlook for the global economy fueled a retreat from recent highs, keeping the safe-haven yen broadly higher.
Investors are hoping that the global economy may have hit a bottom, though the timing and potential strength of a recovery are far from clear. The MSCI index of Asian stocks outside Japan has surged 53 percent from its 2009 low on March 4 to its yearly high on May 11, but the global equity rally has shown signs of losing steam in recent days.
The euro slid as low as 127.42 yen on trading platform EBS, down 0.8 percent from late New York trade on Friday. The U.S. dollar fell 0.5 percent to 94.75 yen, staying near a two-month low of 94.55 yen struck earlier on EBS. Growing investor caution is affecting riskier assets such as oil, which slumped nearly 4 percent on Friday amid doubts about the strength of global
demand for energy. U.S. crude futures were flat above $56 a barrel.
Japan's Nikkei 225 Average shed 2.4 percent to hit its lowest close since May 1, with exporters such as Sony sinking as the yen advanced against the dollar. Panasonic dropped 7.6 percent after it forecast a bigger-than-expected annual loss following a record quarter of red ink, battered by weak demand, price falls and restructuring costs.
Seoul shares finished down 0.3 percent, led by energy issues including SK Energy, weighed down by weakness in the won currency and recent falls in crude prices, but gains in automakers lent support.
Australian stocks closed 1 percent lower, trimming earlier losses as the banks improved in afternoon trade, while concerns about the economic outlook hit mining stocks and an unending wave of capital-raisings hurt sentiment. Clothing retailer Billabong International and grains
handler GrainCorp both announced plans to raise equity, the latest in a series that has seen Australian firms raise around $18 billion so far this year.
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Hong Kong shares rose 1.4 percent despite a record contraction in the local economy and an economic slump in euro-zone countries, while lower oil prices hit energy stocks hard. Shares of Esprit, the world's No.6 fashion brand by market capitalization, tanked 2.5 percent on concern over its earnings outlook amid a recession in its core markets in Europe, in particular Germany, which constitutes half of its revenue.
Singapore's Straits Times Index swung into the black, up 1.6 percent. This after data showing that key exports contracted for a 12th straight month in April, and at a faster pace as the ongoing global economic meltdown, was released. Singapore Airlines, the second biggest carrier by market value, rose 3.3 percent after it saw passenger loads stabilize in April.
China's Shanghai Composite Index edged 0.3 percent higher, with financial and property shares weak but Yangtze Power surged in heavy volume after announcing a restructuring plan, draining money from other large caps, analysts said. Yangtze rose as its shares resumed trade after a one-year suspension, boosted by a 107.5 billion yuan restructuring plan that will give it ownership of the world's largest hydropower facility at Three Gorges Dam.