Asian markets fell on Wednesday following big losses on Wall Street after weak reports and forecasts from top US companies, while fresh fears over Spain added to selling pressure.
Shares in Hong Kong, Shanghai and Tokyo did manage to rebound slightly after China released data showing the contraction in manufacturing activity had eased a touch, but they were unable to maintain their strength.
The losses have also been stoked by profit-taking after an impressive run by global markets in recent weeks following easing measures in the United States, Japan and Europe, while China has also showed signs of a pick-up.
Tokyo closed 0.67 percent lower, shedding 59.95 points to 8,954.30, Seoul fell 0.67 percent, or 12.85 points, to 1,913.96 and Sydney ended 0.82 percent, or 37.3 points, down at 4,505.8.
In afternoon trade Hong Kong was down 0.24 percent and Shanghai was down 0.10 percent. Mumbai was closed for a public holiday.
Investors took fright at big falls in New York after poor earnings figures and guidance from DuPont, United Technologies, UPS, Xerox, Radio Shack and 3M provided evidence that the US corporate earnings boom is stalling.
Chemicals giant DuPont was the stand-out loser, lowering its 2012 outlook after posting a 98 percent fall in earnings in the three months to September. It also said it would cut around 1,500 jobs over the next 18 months.
“The US earnings report season has disappointed, with 60 percent of companies missing revenue forecasts so far,” Sean Callow, at Westpac Global Strategy group in Sydney, said in a note.
US shares tumbled. The Dow lost 1.82 percent, the S&P 500 sank 1.44 percent and the Nasdaq lost 0.88 percent.
In Europe, the Bank of Spain forecast the economy would contract 0.4 percent in the third quarter. If confirmed, the figures would mean the recession, which has left one in four workers unemployed, is moving into a second year.
Moody’s cut its debt rating for five Spanish regions by one or two notches each, blaming their weak financial positions and looming debt redemptions.
Data out of Beijing Wednesday indicated the manufacturing sector was showing signs of recovery, with the HSBC Purchasing Managers Index (PMI) hitting 49.1 this month, the highest level in three months and up from 47.9 in September. A reading above 50 indicates growth.
While the figures mark the 12th straight month of contraction, they also represent the second consecutive monthly improvement and add to recent indications the economy is on the mend after a slowdown.
However, Qu Hongbin, HSBC’s chief economist for China, warned that problems in overseas economies including Europe and the United States, as well as China’s job market, continue to pressure the economy.
“This calls for a continuation of policy easing in the coming months to secure a firmer growth recovery,” he said in a statement.
On currency markets the euro, which fell in New York, held up in Asia. The single currency bought $1.2982 and 103.60 yen in afternoon trade, compared with $1.2978 and 103.64 yen in New York late Tuesday.
The dollar was at 79.79 yen against 79.84 yen.
Oil was higher, with New York’s main contract, light sweet crude for delivery in December, adding 77 cents to $87.44 a barrel in the afternoon and Brent North Sea crude for December gaining 70 cents to $108.95.
Gold was at $1,708.30 at 0615 GMT compared with $1,710.66 late Tuesday.
In other markets:
— Taipei fell 0.31 percent, or 22.60 points, to 7,314.88.
Taiwan Semiconductor Manufacturing Co. shed 0.35 percent to Tw$85.4 while leading smartphone maker HTC rose 2.13 percent to Tw$263.5.
— Wellington closed flat, edging down 2.81 points to 4,001.45.
Telecom rose 0.2 percent to NZ$2.48 and Contact Energy was up 1.9 percent at NZ$5.51.
