Asia Markets recap: Wall Street sell-down weighs on stocks

Reuters

Welcome to the Asia Markets live blog, a running account of what the region’s stock markets are doing, along with other news.  Today, stocks are trading broadly lower after sharp losses Friday in the U.S.

• • 8:23 am
  • Japan's trade deficit puts on weight
  • by Mike Kitchen
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  Japan lifted the veil on its trade data just ahead of the Monday open, presenting the world with its 18th deficit in a row, and one much wider than what economists had expected.
  The trade gap printed at 1.302 trillion yen ($12.8 billion), widening from ¥1.293 trillion in November and beating a projected ¥1.256 trillion deficit predicted in a Wall Street Journal survey. The result came even as the yen traded around its lowest levels against the dollar since late 2008.  Read the details here.
  Not that a better-than-expected result would have helped equities much. A glut of selling Friday on Wall Street, where the S&P 500 retreated 2.1%, all but insured a tough road for the Nikkei Average today. Currently, about 20 minutes into trade, the Nikkei Average is 2.7% below last week’s close.
  
• • 8:34 am
  • Australia closed, likely to fall tomorrow
  • by Mike Kitchen
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  Sydney markets are closed today, celebrating Australia Day, which marks the arrival of the British in 1788 at Sydney Cove, not far from the current ASX market site. The holiday was actually Sunday, but it’s observed today to make sure everyone gets some time off work.
  But of course, the forex markets never sleep, and they show the Australian dollar pushing ever lower — now at 86.82 U.S. cents from Friday’s 87.03 U.S. cents. And barring a late-session rally for other Asia markets today, Australian equities will likely lose some ground when they reopen tomorrow.
  
• • 8:57 am
  • Ominous report on China bank-transfer shutdown
  • by Mike Kitchen
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  In what may be big news (or, possibly, a big misunderstanding), China has halted all bank cash transfers for three days and all forex conversions out of yuan for nine days, according to a Forbes item out Sunday.
  Given that this comes just ahead of the Lunar New Year — basically China’s equivalent of Christmas, when cash needs are at their highest —this is troubling (that is, if it’s true… we’re trying to confirm this now).
  The Forbes contributor, who reported the closure citing a notice issued by Citi on its Chinese portal, described the official excuse (system maintenance at the central bank) as “preposterous.”
  “Something is very wrong in China at the moment. Banks’ apparent need to conserve cash, coming just weeks after the last incident, looks ominous,” the Forbes contributor writes.
  We’ll see how this shakes out, though can’t imagine it having a positive effect on the Hong Kong open, due in about 35 minutes.
  
• • 9:03 am
  • Japan stocks jolted
  • by Carla Mozée
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  It looks like Japan’s Nikkei Stock Average is well on its way toward a third consecutive loss, declining by 2.7% an hour into Monday’s session. See more here.
  Among the most actives on the index, which tracks 225 issues, Mizuho Financial and Mitsubishi UFJ Financial each fell 2.6%, and Mazda Motor sank 4%.
  Advantest was logging the largest percentage fall as its shares sagged 5%. Only two stocks managed to eke out gains: Fish company Maruha Nichiro Holdings rose 2.3%, and construction services firm Obayashi Corp. rose 1.7%.
  
• • 10:33 am
  • UPDATE: Ominous report on China bank transfers
  • by Mike Kitchen
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  So maybe we can relax now?
  It turns out that, in spite of the breathless tone of the Forbes report, the suspension of China’s bank transfers seems to have been flagged by the central bank well in advance, only involves smaller amounts. According to a People’s Bank of China statement from earlier this month, such maintenance shutdowns will occur on a monthly basis for short periods.
  And in any case, one local report notes that customers can still do transfers via ATMs, even if online banking won’t have that function for the next three days.
  The author of the Forbes piece — Gordon Chang, who also wrote the book “The Coming Collapse of China” — appeared Monday on CNBC to defend the piece, saying that similar announcements from the PBOC came out ahead of credit crunches last year, such as in June.
  That said, Chang also wrote a similar piece in June, entitled “Citibank Caught In China Cash Crunch, Not Making Money Transfers,” so maybe history is repeating in more ways than one.
  
• • 10:40 am
  • Markets check -- 10:40 a.m. in Hong Kong
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  Japan (Nikkei Average) down 2.5% (at break)
  Hong Kong (Hang Seng Index) down 2.3%
  Shanghai (Shanghai Composite Index) down 1%
  Sydney (S&P/ASX 200) closed for holiday
  Seoul (Kospi) down 1.7%
  Taipei (Taiex) down 1.6%
  
• • 10:58 am
  • Hong Kong caught in tide of selling
  • by Mike Kitchen
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  A little over an hour into Hong Kong trading, and of course, the market is weak. (Read details here).
  The Hang Seng Index, though only representative of 50 blue chip issues, is off 2.1%. Some financials (China Everbright, Haitong Securities) are down more than 4%, and some casino shares (Melco, Wynn) are more than 5% lower.
  Good news for those short China equities, or those hoping to buy the dips. And if not, there could always be a bounce-back tomorrow…
  
• • 12:31 pm
  • Markets check -- 12:31 p.m. in Hong Kong
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  Japan (Nikkei Average) down 2.1%
  Hong Kong (Hang Seng Index) down 2.1% (at break)
  Shanghai (Shanghai Composite Index) down 0.7% (at break)
  Sydney (S&P/ASX 200) closed
  Seoul (Kospi) down 1.5%
  Mumbai (Sensex) down 1.4%
  Taipei (Taiex) down 1.5%
  
• • 12:46 pm
  • Japan's trade deficit is here to stay, says HSBC
  • by Mike Kitchen
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  HSBC says in a note out today that while temporary factors may have been responsible for Japan’s 2013 trade deficit (the worst ever in terms of percentage of GDP), structural factors mean Japan’s trade gap is probably here to stay.
  In terms of those considerations special to the 2013 “trade annus horribilis,” as HSBC puts it, the bank’s Japan economist Izumi Devalier writes:
  “There’s a perfect storm brewing here. Imports have been particularly elevated over the past 12 months because of 1) the consumption-led nature of Japan’s recent recovery, and 2) a weaker yen, which has raised the cost of foreign goods.”
  But going forward, the nation’s trade account is unlikely to reverse itself, HSBC says. And it’s not just because of a rising import bill from fossil fuels after the 2011 nuclear disaster forced the closing of nuclear plants. Devalier writes:
  “The secular downtrend can also be attributed to changing consumption patterns (which has raised non-fuel imports) and increased off-shoring (which has dampened exports). The former is reflected in soaring demand for imported medicines — a consequence of rapid population aging.”
  “Meanwhile, increased off-shoring of electronics production and shifting consumer preferences have pushed up imports of electronics, including brand-name smartphones. This is reflected in the rising trade deficit with China and in the electrical-machinery industry.”
  
• • 12:49 pm
  • VIDEO: Market selloff spreads to Asia
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• • 1:34 pm
  • Markets check -- 1:34 p.m. in Hong Kong
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  Japan (Nikkei Average) down 2.3% late
  Hong Kong (Hang Seng Index) down 2%
  Shanghai (Shanghai Composite Index) down 0.7%
  Sydney (S&P/ASX 200) closed
  Seoul (Kospi) down 1.4% late
  Mumbai (Sensex) down 1.5%
  Taipei (Taiex) down 1.7% late
  
• • 2:25 pm
  • Another day, another loss for Japan stocks
  • by Carla Mozée
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  Japanese stocks began the week on a down note as the benchmark Nikkei Stock Average sank 385 points, or 2.5%, to close at 15,005.73. That marked the Nikkei’s lowest finish since Nov. 14. Also, the Nikkei hasn’t ended higher since last Wednesday.
  The market is sensitive to fluctuations in the dollar-yen pair, which earlier in session saw the dollar hit a two-month low against its Japanese counterpart. See more in the Currencies report.
  The fall for Japanese stocks came after U.S. stocks slid on Friday, hit by risk aversion among investors. Let’s see how the cycle continues on Wall Street later today.
  
• • 4:04 pm
  • Markets check -- 4:04 p.m. in Hong Kong
  • by Laura He
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  Japan (Nikkei Average) down 2.5% (closed)
  Hong Kong (Hang Seng Index) down 2.1% (closed)
  Shanghai (Shanghai Composite Index) down 1% (closed)
  Sydney (S&P/ASX 200) closed
  Seoul (Kospi) down 1.6% (closed)
  Taipei (Taiex) down 1.6% (closed)