Asia stocks retreat on China growth worries; Nikkei closed

Published 03/20/2012, 03:43 AM
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Investing.com - Asian stock markets were broadly lower on Tuesday, as concerns over China’s outlook weighed on appetite for riskier assets in a session absent of guidance from markets in Japan, which were closed on holiday.

During late Asian trade, Hong Kong's Hang Seng Index dropped 0.8%, while Australia’s S&P/ASX200 shed 0.37%,

Trading volume in the region was subdued as Japan’s Nikkei 225 Index remained closed for a public holiday.

Shares in Hong Kong were headed for their lowest close since March 8 after China increased fuel prices for the second time in less than six weeks.

Refiners will charge 7% more for gasoline and 7.8% more for diesel, the biggest price increases in more than two years, sparking concern growth in the world’s fastest-growing major economy may slow more-than-expected.  

Chinese Premier Wen Jiabao lowered the country’s economic growth expansion target to 7.5% earlier this month, down from 8% over the past seven years.

Rising gasoline prices pose a downside risk to the U.S. economic recovery, New York Federal Reserve President William Dudley said Monday.

Shares in Chinese oil producers and refiners failed to get a boost from the price hike. Sinopec shares fell 2.9%, PetroChina slumped 1.1%, while CNOOC dipped 0.6%.

Shares in property developers performed poorly, extending their recent run of declines. Shares in Agile Property Holdings dropped 3.5%, Evergrande Real Estate Group slumped 2.95% and Sino Land declined 1%.
 
Sun Hung Kai Property shares came under selling pressure, losing 2.4%, after a senior executive at the property group had been arrested by Hong Kong's anti-graft enforcement agency as part of an investigation into suspected bribery.

Financials were broadly weaker ahead of key earnings later this week. With 75% of Chinese companies having reported fourth quarter results so far, 45% have missed analysts' estimates while only 17% have beat them, Citigroup said in a report.

Agricultural Bank of China which will post earnings on Thursday, first among the so-called "Big Four" Chinese banks, shed 1.4%.

Meanwhile, in Australia, raw material producers came under pressure amid concerns over a slowdown in demand from China, which was the top consumer for many commodities.

Shares in OneSteel tumbled 5.35%, Alumina dropped 2%, while gold producer Newcrest Mining declined 1.15%.

Mining giant BHP Billiton dipped 0.1% after its chairman reportedly said the miner was revaluating its capital-spending plans amid slowing growth in China.

Looking ahead, the outlook for European stock markets was mildly downbeat. The EURO STOXX 50 futures pointed to a loss of 0.25%, France’s CAC 40 futures indicated a decline of 0.3%, Germany's DAX futures shed 0.3%, while London’s FTSE 100 futures slipped 0.35%.

Later in the day, the U.S. was to produce official data on building permits and housing starts. Meanwhile, Federal Reserve Chairman Ben Bernanke was to speak at an event in Washington; his comments would be closely watched.

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