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Asian Stocks Drop on US Growth Concern

  • Claudia Blume

Stock indexes have tumbled across Asia following declines in U.S. stock markets.

Share prices in Asia plunged Thursday. The decline was a reaction to losses on Wall Street that had been triggered by concerns about inflation and the prospect of higher interest rates.

On Wednesday, the Dow Jones Industrial Average fell almost 1.2 percent in New York.

Chris Rocks, an equity strategist with Macquarie Bank in Hong Kong, says it is very common for movements in the U.S. markets to have an immediate effect on Asia.

"Over longer periods of time that correlation is not as strong, but certainly there is always an initial response to any major moves in the U.S.," commented Mr. Rocks.

Asia's biggest loss was on Japan's Topix stock index, which lost 2.7 percent. Japan's benchmark Nikkei average fell 2.4 percent, its biggest drop since April 18.

Key stock indexes in South Korea, Australia and Hong Kong all gave up more than two percent.

Mr. Rocks says that certain sectors in Asia have been particularly affected by the slide of the U.S. market and worries about rising U.S. inflation and interest rates.

"It is primarily having an effect on what we call the high beater sectors, those most closely linked to the global economy, so that would be materials stock in particular, so mining companies, steel companies have been affected and today you also had the technology companies affected as well," he added.

Stocks of export-dependent companies also.

Japanese company Canon, the world's biggest seller of copiers and digital cameras, fell more than five percent.

Samsung Electronics, one of South Korea's biggest exporters, slid 2.5 percent. Hyundai, South Korea's largest automaker, fell 1.4 percent. The United States is Hyundai's biggest export market.

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