A sharp slowdown in China's economy is rattling Asia's largest stock markets, with Japan falling 3.1% Friday and Hong Kong set for its worst week in nearly two years.
Global investors are exiting the region too, yanking $1.3 billion out of Chinese equities in the week to March 12, according to research from ANZ-the largest withdrawal since June 2013 when Chinese markets were rocked by a liquidity crunch.
The rout started Monday as reports dribbled out showing a slowdown in Chinese retail, manufacturing, housing and investment sectors, raising concerns over the health of the world's second-largest economy.
That is forcing economists to reassess their growth forecasts this year for China, while jitters have also risen over debt-laden companies too, with fears that another company could fail to pay off its debts, just a week after the country experienced the first default in its corporate debt market.
The biggest fall over the past five days is the 5.8% dive in Japan's Nikkei, slammed by a rising yen that hurts the outlook for exporters.
Hong Kong's Hang Seng Index has dropped 4.9%-the benchmark's worst week since May 2012, when the market dropped as concerns over the euro-zone crisis combined with fears over a hard landing for the Chinese economy.
Other markets too have been caught up in the downturn, especially commodities, with copper dropping to its lowest level since July 2010.
Copper for May delivery was at $6,376.25 a ton early on Friday-down 0.1% and extending its weekly loss to 6%. Investors have flocked to gold instead, with the price reaching $1,376.42 an ounce, a rise of 2.8% since March 7.
Adding to the gloom are continuing tensions between Ukraine and Russia that helped send Wall Street tumbling Thursday, suffering its worst day since February.
"It's about risk, and investors are now firmly back in 'risk-off' mode now," said SMBC Nikko Securities general manager of equities Hiroichi Nishi. But for investors in Asia, China is the main focus.
The deluge of disappointing data out of the mainland led Bank of America this week to sharply cut its forecast for first-quarter growth to 7.3% from 8.0%.
That sentiment has also spilled over into China's currency, which has continued to weaken as the central bank fixed the daily reference rate at its lowest for the year on Friday at 6.1346 against the greenback.
The offshore yuan, traded freely outside mainland China, accelerated losses this week, dropping 0.5%, touching 6.1458 during the day. It closed at 6.1095 on March 7.
The Nikkei was last down 3.1% on Friday, with the market weighed by a yen that had strengthened substantially overnight, and continued to pull down markets. The dollar fell 0.9% overnight against the yen, its largest daily fall since early February, and fell a touch more in Asia to Yen101.76.
"Japan stocks often take the first hit on bad Asian news, then when the U.S. markets fall later, they react to that as well, resulting in a 'double whammy' effect," said Tokyo-based hedge fund manager Ed Rogers, CEO of Ed Rogers Investment Advisors.
It was a similar story in Australia, where stocks had stopped trading on Thursday before the Chinese data was released.
On Friday, the S&P/ASX 200 fell 1.2%. Elsewhere in Asia, Hong Kong's Hang Seng Index was down 1%, the Shanghai Composite fell 0.8%, and Singapore's Straits Times Index lost 0.5%.
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Global investors are exiting the region too, yanking $1.3 billion out of Chinese equities in the week to March 12, according to research from ANZ-the largest withdrawal since June 2013 when Chinese markets were rocked by a liquidity crunch.
The rout started Monday as reports dribbled out showing a slowdown in Chinese retail, manufacturing, housing and investment sectors, raising concerns over the health of the world's second-largest economy.
That is forcing economists to reassess their growth forecasts this year for China, while jitters have also risen over debt-laden companies too, with fears that another company could fail to pay off its debts, just a week after the country experienced the first default in its corporate debt market.
The biggest fall over the past five days is the 5.8% dive in Japan's Nikkei, slammed by a rising yen that hurts the outlook for exporters.
Hong Kong's Hang Seng Index has dropped 4.9%-the benchmark's worst week since May 2012, when the market dropped as concerns over the euro-zone crisis combined with fears over a hard landing for the Chinese economy.
Other markets too have been caught up in the downturn, especially commodities, with copper dropping to its lowest level since July 2010.
Copper for May delivery was at $6,376.25 a ton early on Friday-down 0.1% and extending its weekly loss to 6%. Investors have flocked to gold instead, with the price reaching $1,376.42 an ounce, a rise of 2.8% since March 7.
Adding to the gloom are continuing tensions between Ukraine and Russia that helped send Wall Street tumbling Thursday, suffering its worst day since February.
"It's about risk, and investors are now firmly back in 'risk-off' mode now," said SMBC Nikko Securities general manager of equities Hiroichi Nishi. But for investors in Asia, China is the main focus.
The deluge of disappointing data out of the mainland led Bank of America this week to sharply cut its forecast for first-quarter growth to 7.3% from 8.0%.
That sentiment has also spilled over into China's currency, which has continued to weaken as the central bank fixed the daily reference rate at its lowest for the year on Friday at 6.1346 against the greenback.
The offshore yuan, traded freely outside mainland China, accelerated losses this week, dropping 0.5%, touching 6.1458 during the day. It closed at 6.1095 on March 7.
The Nikkei was last down 3.1% on Friday, with the market weighed by a yen that had strengthened substantially overnight, and continued to pull down markets. The dollar fell 0.9% overnight against the yen, its largest daily fall since early February, and fell a touch more in Asia to Yen101.76.
"Japan stocks often take the first hit on bad Asian news, then when the U.S. markets fall later, they react to that as well, resulting in a 'double whammy' effect," said Tokyo-based hedge fund manager Ed Rogers, CEO of Ed Rogers Investment Advisors.
It was a similar story in Australia, where stocks had stopped trading on Thursday before the Chinese data was released.
On Friday, the S&P/ASX 200 fell 1.2%. Elsewhere in Asia, Hong Kong's Hang Seng Index was down 1%, the Shanghai Composite fell 0.8%, and Singapore's Straits Times Index lost 0.5%.
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