Asian shares eased on Tuesday after sentiment was weakened by data showing Germany’s business confidence dropped in September, and a weak earnings forecast from Caterpillar Inc, both of which underscored worries about a global growth slowdown.
Uncertainty about the bailout prospect for Greece and Spain, which are the two major risks in what has become the euro zone’s three-year-long debt crisis, also undermined investors’ risk appetite.
The MSCI index of Asia-Pacific shares outside Japan inched down 0.1 percent. Australian shares were down 0.2 percent, and South Korean shares fell 0.3 percent.
Tokyo’s Nikkei average opened down 0.4 percent, hitting a fresh one-week low.
“The German data is just the latest sign of a global slowdown and is likely to drag on the market today,” said Toshiyuki Kanayama, senior market analyst at Monex. The German Ifo institute’s monthly business sentiment index fell for a fifth successive month in September to its lowest level since early 2010, with the outlook component touching its worst level since May 2009.
“This lends support to the thesis that the weaker growth outlook is spreading to the EU core,” Barclays Capital said in a note.
Caterpillar, the world’s largest maker of earth-moving equipment, cited weakness in the world economy when cutting its 2015 earnings forecast, raising the possibility of weak guidance from other firms as U.S. earnings reporting season approaches.
