Asian Markets Sink as US 'Fiscal Cliff' Fears Set In
By Prasanth Aby Thomas | November 8, 2012 9:02 PM EST
Asian indices have dropped, as fears of the US "fiscal cliff" mount and a ratings agency warns that the world's largest economy could face a credit downgrade.
Japan's Nikkei average ended 1.51 percent or 135.74 points lower to 8837.15. South Korea's KOSPI fell 1.19 percent or 23.14 points to 1914.41.
China's Shanghai Composite Index was down 1.63 percent or 34.22 points to 2071.51 while Hong Kong's Hang Seng dropped 2.41 percent or 532.94 points to 1566.91.
Global market sentiments remained low as investors moved on from the relief of US elections ending without any major crises, to economic issues. Rating agency Fitch is reported to have warned that the US could lose its AAA status if the administration failed to reach a solution for the "fiscal cliff" - a combination of deep spending cuts and tax hikes.
Concerns on the eurozone too weighed heavily on investor sentiments. Greece has managed to get a fresh set of austerity measures approved marginally by its parliament, even as protests against the government's plans continued on the streets of Athens. But concerns on the administration's ability to carry out further reforms remain.
News from Japan added to the concerns. Official data suggested that the country's machinery orders fell more than expected while the current account surplus narrowed. The figures, along with earlier reports, have increased concerns of an imminent recession in the country.
Focus is also on China, where the Communist regime is expected to unveil a new set of leaders for the country. With Obama entering a second term, investors will be keeping a close watch on how the two largest economies in the world continue their relationship.
Some of the major exporters ended lower in Tokyo. Citizen was down 7.91 percent while Pioneer fell 4.05 percent. Shares of Sony and Canon were down 2.96 and 2.56 percent.
Coal producer China Coal Energy and property developer China Resources Land were the major losers in Hong Kong, down 4.20 and 3.80 percent.
Chemical stocks were down in Shanghai. Hubei Xingfa Chemicals Group fell 9.76 percent while Heilongjiang Heihua was down 8.40 percent. Shares of Blue Star New Chemical Material dropped 7.58 percent.
Utilities traded lower in India. Shares of GAIL India were down 2.51 percent while those of Tata Power slipped 2.26 percent.
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