By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) -- Japanese stocks slumped to lead Asian
markets lower Wednesday, tracking a global selloff on heightened
fears of U.S.-led military intervention in Syria.
The Nikkei Stock Average tumbled 2% in Tokyo, and Hong Kong's
Hang Seng Index fell 1.1%, though the Shanghai Composite lost a
more modest 0.3%.
Australia's S&P/ASX 200 dropped 1%, and South Korea's Kospi
fell 0.5%.
The declines followed a 170-point, 1.1% drop Tuesday for the Dow
Jones Industrial Average (DJI), with equities in the Middle East
and Europe also slammed on worries over escalation in Syria, after
government forces reportedly used chemical weapons against
civilians amid the ongoing civil war.
U.S. President Barack Obama is currently consulting with allies
and members of the U.S. Congress on the response.
Several analysts said the developments posed a new risk to
global markets, but they advised investors against expecting a
major impact on the global economy from a possible military
confrontation.
"This selloff is a clear knee-jerk reaction by global market
participants who are clearly reducing risk over fears the situation
in Syria could deteriorate substantially. It's just a typical case
of irrational fear driving investors' decision making," said Rivkin
Securities analyst Tim Radford.
Wells Fargo Advisors chief international strategist Paul
Christopher said any potential change in the balance of power in
Syria's civil war poses a new uncertainty for financial and
commodity markets, but it doesn't immediately threaten the global
economy.
The losses were spread across sectors in multiple markets, with
internationally exposed firms in Japan also suffering as the U.S.
dollar (USDJPY) strengthened from Tuesday's levels to hover around
97 yen.
Tokyo Steel Manufacturing Co. sank 6.2%, Kubota Corp. skidded
3.1%, Suzuki Motor Corp. (SZKMY) lost 3.9%, and Matsui Securities
Co. (MAUSY) fell 3.7% in Tokyo.
Among loss leaders in Hong Kong, state-owned PetroChina Co. and
its natural-gas-distribution unit Kunlun Energy Co. -- both
constituents of the Hang Seng Index -- fell sharply as trading
resumed after a halt Tuesday at the companies' request.
PetroChina (PTR) slumped 4.1%, and Kunlun (CNPXF) plunged 10.8%,
after PetroChina said three of its senior executives, including the
chairman of Kunlun, were under investigation by authorities for
"severe disciplinary violations."
PetroChina's Shanghai-listed shares dropped 1.1%.
Several property developers also declined, with China Resources
Land Ltd. (CRBJF) shedding 3.3% in Hong Kong, while Gemdale Corp.
dropped 1.7% and Poly Real Estate Group Co. shed 1.6% in
Shanghai.
In Seoul, LG Display Co. (LPL) gave up 1.2%, and KB Financial
Group Inc. (KB) dropped 1.7%, while heavyweight Samsung Electronics
Co. (SSNLF) lost 0.4%, falling less than the broader market.
In Australia, the resource sector saw weakness despite sharp
gains for oil and gold futures overnight in the U.S.
Diversified miner BHP Billiton Ltd. (BHP) dropped 1.7%, gold
producer Newcrest Mining Ltd. (NCMGF) fell 1.1%, and energy firm
Santos Ltd. (SSLTY) shed 0.9%.
Shares of Woolworths Ltd. rose 0.7% after saying it expects
subdued retail conditions in fiscal 2014, but projecting earnings
growth of 4% to 7% from continuing operations for the year.
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