Asian shares slip as bank fears add to global gloom
TOKYO - Asian shares fell for a sixth straight session on Friday as concerns about the health of European banks further threatened a global economy already under strain from falling oil prices and slowdowns in China and other emerging markets.
The prices of yen, gold and liquid government bonds of favoured countries soared as investors rushed to traditional safe-haven assets.
"The markets are clearly starting to price in a sharp slowdown in the world economy and even a recession in the United States," said Tsuyoshi Shimizu, chief strategist at Mizuho Asset Management.
"I do not expect a collapse or major financial crisis like the Lehman crisis but it will take some before market sentiment will improve," he added.
MSCI's index of Asia-Pacific shares outside Japan fell 0.8 per cent.
Japan's Nikkei fell 5.4 per cent to a 15-month low and posted a weekly loss of 11.1 per cent, its biggest since October 2008, as this week's sudden spike in the yen took most investors by surprise.
"It is hard to find a bottom for stocks when the yen is strengthening this much. It is hard to become bullish on the market in the near future," said Masaki Uchida, executive director of equity investment at JPMorgan Asset Management.
"But the valuation of some (Japanese) bank shares is extremely cheap. So for long-term investors, it could be a good level to buy," he added.
European shares are expected to rebound, however, after big falls earlier this week, with spread-betters expecting Britain's FTSE to rise 2.0 per cent and German's DAX and France's CAC to gain 1.3 per cent.
The FTSEurofirst 300 index of top European shares sank 3.7 per cent to its lowest level in 2-1/2 years.
Financial shares led losses in Australia and Hong Kong, falling 1.6 per cent and 1.8 per cent though their declines are still modest compared to peers in Europe and the US.
"We have been hit by a steady spate of bad news since the year began and I think the markets will remain in a state of flux in the near term until we see global bank shares stabilising," said Francois Perrin, portfolio manager for East Capital Asia in Hong Kong.
MSCI's broadest gauge of stock markets fell0.6 per cent in Asia on Friday, hitting a fresh low since June2013.
It has fallen fell more than 20 per cent below its record high last May, confirming global stocks are in a bear market.
On Wall Street, the U.S. benchmark S&P 500 fell 1.23per cent to 1,829.08, its lowest close in almost two years and down 10.5 per cent for the year.
- Reuters
