Asia Falls as US Housing Data Spark Recovery Fears
Asian stocks slid on Wednesday after Wall Street closed lower as an unexpected fall in poor U.S. housing dataadded to worries about the fragility of the global economic recovery and optimism over China's promise to make the yuan more flexible faded further.
Japan's Nikkei average dropped 1.9 percent on Wednesday to a one-week closing low, sliding towards a key support level, as the technical picture turned increasingly dark and worries about the euro zone flared up again.
Shares of NTT Data tumbled 8.4 percent, dragging on the Nikkei, after the systems integration and information technology firm said an employee was arrested on suspicion of bribing a Japan Patent Office official.
The benchmark Nikkei declined 189.19 points to 9,923.70, erasing all of the gains made Monday when it surged 2.4 percent to a one-month high on hopes China's increased flexibility on the yuan would increase the country's buying power.
In another weak technical sign, the Nikkei's MACD, a longer-term momentum indicator, was flattening out after rising for two weeks.
Market players said that in addition to firm support at the 25-day moving average of 9,800, short-covering emerged around 9,900, a psychological support level.
The broader Topix fell 1.5 percent to 880.84.
Trade was thin on the Tokyo exchange's first section, with 1.6 billion shares changing hands, though slightly up from last week's four-month low just below 1.5 billion.
The Korea Composite Stock Price Index finished down 0.33 percent at 1,725.82 points with exporters leading the decline, weighed down by weakness in U.S. home sales data.
Samsung Electronics, the world's No.1 memory chip maker, lost 1.35 percent and Hyundai Motor, South Korea's top car maker, shed 3.08 percent.
Airlines and tour issues continued to outperform amid growing expectations that demand for overseas tours will be strong this year, following depressed demand last year in the aftermath of financial crisis. Asiana Airlines, South Korea's No.2 air carrier, rose 0.33 percent and tour agency Hana Tour advanced 2.12 percent.
Steelmakers continued to be buoyed by POSCO's decision to raise prices of its benchmark steel products.
The world's No.4 steelmaker advanced 1.41 percent and Hyundai Steel also climbed 1.41 percent.
Australian stocks fell 1.6 percent, as investors shunned stocks in favour of safer assets like gold on worries about a patchy U.S. economic recovery.
The slide was exacerbated by a late sell-off in the banks, which one analyst attributed to worries among some investors offshore about Australia's top banks, which dominate home lending, being susceptible to a housing bubble.
Westpac Banking and Commonwealth Bank of Australia, the two biggest home lenders, led the banks lower, with Westpac dropping 3.3 percent.
The benchmark S&P/ASX 200 index lost 72.2 points to close at 4,486.1.
Hong Kong stocks fell as optimism over a more flexible yuan dissipated, and as weak U.S. housing data and uncertainty over Washington's ban on deepwater oil drilling hit Wall Street.
Bank of Communications (BoCom), China's fifth-biggest lender, gained 1.2 percent after it said on Tuesday it had completed its rights issue of yuan-denominated A shares, raising 17.13 billion yuan ($2.52 billion) after attracting strong demand as expected.
The Shanghai Composite Index ended at 2,569.9 points after an early rise faltered at the psychologically key 2,600 point mark, which has repeatedly capped recent attempts to rally, including a climb to a three-week closing high this week after China ended the yuan's nearly two-year peg to the dollar.
In Southeast Asia, Singapore's Straits Times Index and Malaysia's KL Composite Index fell 0.4 percent and 0.1 percent respectively. CDL Hospitality Trusts tumbled over 7 percent after it announced a placement of new units at the lower end of an indicative range.