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Asia stocks tumble on dire global outlook; Nikkei drops 2.2%

Published 09/06/2011, 02:51 AM
Updated 09/06/2011, 02:51 AM
Investing.com – Asian stock markets were sharply lower for a second day on Tuesday, with financials and commodity-linked shares leading losses as mounting fears over the global economic outlook prompted investors to dump riskier assets.

During late Asian trade, Hong Kong's Hang Seng Index dropped 1.45%, Australia’s ASX/200 Index fell 1.6%, while Japan’s Nikkei 225 Index tumbled 2.21%.

Lingering worries over the euro zone sovereign debt crisis and mounting concerns over the U.S. economic outlook led to sharp falls in equity markets on Monday.

Shares in the financial sector performed poorly, extending sharp losses from the previous session after a number of major global financial institutions were named in a U.S. government lawsuit over the sales of mortgage-backed securities in the buildup to the 2008 financial crisis.

Japan’s largest lender Mitsubishi UFJ Financial Group saw shares drop 3.85%, Sumitomo Mitsui Financial Group fell 3.4%, while shares in Nomura Holdings, which was named in the lawsuit, tumbled 5.5%.

Japanese exporters with high exposure to the U.S. were broadly lower, amid a downbeat outlook for export earnings. Consumer electronics giant Sony saw shares slump 2.45%, Panasonic shares dropped 3.45%, while automakers Honda and Nissan retreated 2.1% and 3.25% respectively.

On the upside, shares of nuclear power providers were boosted after Japan’s new Prime Minister Yoshihiko Noda indicated his support for atomic energy. Shares in Kansai Electric Power jumped 3.5%, while Shikoku Electric Power saw shares climb 4.4%.

In Hong Kong, shares in the financial sector dropped heavily, with shares in Bank of China Hong Kong falling 2.55% and Hong Kong-listed shares of HSBC Holdings declining 3.4%.

Oil producers were also lower, as crude oil prices declined. Shares in China’s largest offshore oil producer CNOOC dropped 3%, while China Shenhua Energy shares slumped 2.5%.

Elsewhere, the outlook for European stock markets was downbeat. The EURO STOXX 50 futures pointed to a drop of 0.85%, France’s CAC 40 futures fell 0.6%, the FTSE 100 futures retreated 0.75%, while Germany's DAX futures indicated a loss of 0.4%.

Later in the day, the euro zone was to produce revised data on second quarter gross domestic product, while Germany was to release official data on factory orders, while the U.S. Institute of Supply Management was to produce a report on U.S. service sector activity.

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