HONG KONG: Technology and energy firms were the biggest losers as Hong Kong and Tokyo led an Asian market plunge on Wednesday (Dec 6), extending retreats across Europe and New York.
A global equity rally has hit the buffers this week as the US probe into Russia's alleged election meddling sows uncertainty, Britain struggles to reach a Brexit deal with the European Union and traders remain cautious about Washington's ability to push through tax cuts.
A key drag for Asia on Wednesday was copper prices which sank more than four per cent in London, having already lost about 10 per cent over the previous week. Analysts blamed a pick-up in the dollar on hopes for US tax cuts.
There are also worries about China's crackdown on borrowing-fuelled investing.
"The sentiment in China has turned less positive after the conclusion of the national party congress, as the deleveraging rhetoric has returned to the market, especially with regards to real estate speculation," TD Securities commodity strategist Ryan McKay told Bloomberg News.
"Worries of the deleveraging's impact on real estate and construction demand saw optimism for commodity demand reduced and prices retreat."
Oil prices were hit by data showing a big rise in US inventories.
Sydney-listed miner Rio Tinto shed 2.5 per cent and BHP was two per cent off, while energy giant Woodside Petroleum lost 0.3 per cent. CNOOC, Sinopec and PetroChina dived in Hong Kong while Inpex was hammered more than three per cent in Tokyo.
'DIFFICULT TO BUY'
The losses hit wider markets. Tokyo ended two per cent down.
"The adjustment mode is deepening lately in the Japanese stock market," said Shunichi Otsuka, general manager in the research department at Ichiyoshi Securities in Tokyo. "It's difficult to buy unless US equities show firmness, even as some high-tech shares are becoming cheap."
Hong Kong lost 2.1 per cent, leaving it more than six per cent off its decade peak touched just over a fortnight ago.
Shanghai closed 0.3 per cent down and Sydney was 0.4 per cent lower following weaker-than-forecast economic growth data, which also dragged down the Australian dollar on expectations the country's central bank will not raise interest rates any time soon.
Seoul gave up 1.4 per cent, while Taipei shed 1.6 per cent and Wellington dropped 0.6 per cent.
In early European trade, London fell 0.4 per cent, while Paris lost one per cent and Frankfurt 1.2 per cent.
Greg McKenna, chief market strategist at AxiTrader, said since the US tax cuts look set to be agreed, the fall in prices could be caused by a so-called "buying the rumour, sell the (almost) fact", mixed with profit-taking following a healthy run-up this year.
The tech sector, which has been the best performer this year, was again in the red on profit-taking and as dealers shifted to firms more likely to benefit from lower US taxes.
Tencent dived 2.7 per cent and AAC technologies was 7.3 per cent lower, extending a profit-taking slump that kicked in last month.
Tencent in November joined the exclusive club of firms with a market cap of US$500 billion, having surged 140 per cent in 2017. And AAC had almost trebled in value since the start of the year until hitting its all-time high three weeks ago.
Samsung was off 2.4 per cent in Seoul and Sony more than three per cent lower in Tokyo.
On currency markets the pound was in trouble, with British-EU talks in limbo after the government's coalition partner dismissed Prime Minister Theresa May's position on the future of Northern Ireland's border with eurozone member Ireland.
May is expected in Brussels again this week to try to get an agreement that would let her move the talks on to trade.
Bitcoin hit another record high of US$12,519 as the cryptocurrency continues to attract interest from investors, having risen 15-fold since mid-January.
Eyes are on Washington this week, where lawmakers must agree a fresh budget by Friday to avoid a painful government shutdown, while US jobs data is also due the same day.
- Key figures around 0820 GMT -
Tokyo - Nikkei 225: DOWN 2.0 per cent at 22,177.04 (close)
Hong Kong - Hang Seng: DOWN 2.1 per cent at 28,224.80 (close)
Shanghai - Composite: DOWN 0.3 per cent at 3,293.96 (close)
London - FTSE 100: DOWN 0.4 per cent at 7,296.01
Euro/dollar: UP at US$1.1827 from US$1.1826 at 2215 GMT
Pound/dollar: DOWN at US$1.3403 from US$1.3441
Dollar/yen: DOWN at ¥112.10 from ¥112.57
Oil - West Texas Intermediate: DOWN 23 cents at US$57.39
Oil - Brent North Sea: DOWN 20 cents at US$62.66 per barrel
New York - DOW: DOWN 0.5 per cent at 24,180.64 (close)