Japan stocks dive after Europe, U.S. sell-off

TOKYO -- Japan's main stock index dived Friday, leading other Asian markets lower, after a sell-off in banking shares roiled investors in the U.S.

See Full Article

and Europe.

Tokyo's Nikkei 225 was down 4.8 per cent to 14,952.61 after earlier sinking as much as 5.3 per cent. Hong Kong's Hang Seng fell 1.0 per cent to 18,364.14. South Korea's Kospi gave up 1.4 per cent to 1,835.01 and Australia's S&P/ASX 200 fell 1.2 per cent to 4,765.30. Shares in New Zealand and Southeast Asia also fell. Markets in China and Taiwan are closed until Monday for Lunar New Year holidays.

Global stocks have been in a slump since the beginning of the year when China's market, which had been propped up by government buying, plunged dramatically. Concerns about China, however, are now just one of several factors behind the bloodletting.

Investors recognize that prices rose too high during several years of artificial support from the ultra-easy monetary policies of central banks that were trying to foster economic recovery following the 2009 global recession. A crunch moment has arrived as global economic growth wanes again and the Federal Reserve signals it is still committed to raising U.S. interest rates from record lows.

The latest turmoil has centred on the stocks of banks, whose profits are threatened by slowing growth and the slump in oil prices.

"The slump in share markets is increasingly looking to be feeding on itself as investors fret that financial turmoil will bring on a recession and cause big problems for banks which in turn drives more selling of shares," Shane Oliver of AMP Capital said in a market commentary.

Fed Chair Janet Yellen voiced confidence in the U.S. economy in testimony to Congress on Thursday, but acknowledged risks, saying it was too early to tell whether they are severe enough to alter the central bank's interest rate policies.

That failed to reassure investors hoping the Fed would signal that rate hikes are off the table for this year, with financial companies taking the biggest hit.

In Tokyo, Japan's Mitsubishi UFG Financial Group fell 2.2 per cent and Mizuho Financial Group Inc. sank 3.7 per cent.

Japanese shares were also weighed down by a surge in the yen's value to 110.99 yen against the dollar, though that gain had largely evaporated by the time trading began in Asia on Friday. A stronger yen will hurt the profits of Japanese exporters, whose planning has been premised on a much weaker level of about 118 yen to the dollar, analysts say.

U.S. shares recovered somewhat from sharp losses on Thursday, but the Dow Jones industrial average still closed down 254.56 points, or 1.6 per cent, to 15,660.18. The Standard & Poor's 500 lost 22.78 points, or 1.2 per cent, to 1,829.08 and the Nasdaq composite fell 16.76 points, or 0.4 per cent, to 4,266.84.

In currency trading, the dollar fell to 112.09 yen from 112.29 the previous day. The euro fell to $1.1307 from $1.1315.

Benchmark U.S. crude was up $1.27 to $27.47 a barrel in electronic trading on the New York Mercantile Exchange. The contract tumbled to $26.21 in New York on Thursday, its lowest level since May 2003, as investors fled to the traditional havens of bonds and precious metals. Gold jumped 4.5 per cent.

Brent crude, a benchmark for international oils, gained $1.36 to $31.42 a barrel in London. It dropped 78 cents, or 2.5 per cent, to $30.06 on Thursday.



Advertisements

Latest Economic News

  • Bogus bongs or bogus lawsuits? Pipe maker sues over fakes

    Economic CTV News
    FORT LAUDERDALE, Fla. -- Don't want to bum your buzz, but that expensive bong you got cheap to smoke your pot may be bogus. High-end German glass water pipe maker Roor and its American licensee are filing lawsuits against smoke shops and mom-and-pop convenience stores in Florida, California and New York. Source
  • 'There isn't a best card out there': How to choose a credit card that works for you

    Economic CBC News
    Credit cards are sometimes lambasted as high-cost consumer debt that can quickly get borrowers into trouble. But if you pay off the balance each month, credit cards can also have significant perks. Loyalty programs like Air Miles, which has both a standalone program and partnerships with credit cards, have drawn a lot of criticism lately, but Canadians are still attached to credit cards that offer rewards. Source
  • Chevron says it has won the latest round in an Ecuadorian legal battle

    Economic CTV News
    Oil giant Chevron Corp. says it has won a round in the Canadian courts in a complex legal battle with a group of Ecuadorian villagers who are trying to collect on a massive judgement they won in Ecuador's courts. Source
  • Liberals ask President Trump to approve Keystone XL pipeline

    Economic CTV News
    Canada’s natural resources minister says that he hopes the new U.S. administration will allow the Keystone XL pipeline quashed by Barack Obama to proceed, noting that all Canadian regulatory approvals are in place. Jim Carr spoke to CTV’s Power Play from Washington, D.C. Source
  • Apple depicts Qualcomm as a shady monopolist in US$1B lawsuit

    Economic CTV News
    SAN FRANCISCO -- Apple is suing mobile chip maker Qualcomm for $1 billion in a patent fight pitting the iPhone maker against one of its major suppliers. The 100-page complaint filed Friday in a San Diego federal court depicts Qualcomm as a greedy monopolist abusing its power in a key segment of the mobile chip market to extort royalties for iPhone innovations that have nothing to do with Qualcomm's technology. Source
  • Trump's 'America first' tone worries head of Canadian oil and gas industry group

    Economic CTV News
    Trump takes charge: Sworn in as 45th president of the U.S.A. Source
  • Obama administration urges Canada to reverse Super Bowl ad decision

    Economic CTV News
    OTTAWA - In one of its final communications with Canada, the outgoing Obama administration is engaging in pigskin politics: asking the Trudeau government to overturn a regulation affecting ads during the Super Bowl. The U.S. Source
  • Oil and stock prices higher as Donald Trump sworn in

    Economic CBC News
    Stock markets responded to the first day of the Trump Administration in a largely positive way, with the Dow Jones, the Nasdaq and the S&P 500 all higher on the day of his swearing in. The Dow Jones Industrial Average was up by nearly 100 points to 19,829 just minutes before the new president formally acceded to the position. Source
  • Stocks higher as Donald Trump lays out glimpse of future economic policies

    Economic CBC News
    Stock markets responded to the first day of the Trump Administration in a largely positive way, with the Dow Jones, the Nasdaq and the S&P 500 all higher on the day of his swearing in. The Dow Jones Industrial Average was up by nearly 100 points to 19,829 just minutes before the new president formally acceded to the position. Source
  • Stocks close higher as Donald Trump lays out glimpse of future economic policies

    Economic CBC News
    Stock markets responded to the first day of the Trump Administration in a largely positive way, with the Dow Jones, the Nasdaq and the S&P 500 all higher on the day of his swearing in. The Dow Jones Industrial Average was up by nearly 100 points to 19,829 just minutes before the new president formally acceded to the position. Source