Asia stock markets slip as traders eye busy week

3 min

Hong Kong (AFP)

Asian markets sank again on Monday after losses on Wall Street and in Europe, with oil prices down and the yen recovering some of the losses suffered at the end of last week.

Dealers moved cautiously at the start of a busy week that includes policy meetings at the US Federal Reserve and Bank of Japan as well as earnings reports from big-name firms including Sony and Nintendo.

The losses follow a sell-off Friday that was fuelled by profit-taking from a recent rally.

Mitsubishi Motors dived almost four percent to extend its losses to a fourth session, having crashed more than 40 percent between Wednesday and Friday after admitting cheating on fuel-efficiency tests.

On Friday the engine rigging scandal that has already battered German giant Volkswagen spread to other car titans as Berlin said a probe found 16 major brands had shown irregularities.

Among the firms dragged into the crisis are Japan's Nissan, France's Renault and Italy's Fiat. Nissan was down 1.3 percent in Tokyo trade.

In the afternoon the Nikkei index was 0.6 percent down, with a recovery in the yen weighing on exporters.

The Japanese unit sank against the dollar Friday on a report that the country's central bank was considering helping financial companies by offering them negative rates on some loans.

The dollar was at 111.18 yen, having risen to 111.80 yen Friday in New York from 109.31 yen earlier in the day.

The yen's move "on Friday was an over-reaction to speculation that the BoJ might be willing to lend to commercial banks with negative interest rates", Gareth Berry, a foreign-exchange and rates strategist at Macquarie Bank in Singapore, told Bloomberg News.

Hong Kong slipped 0.6 percent by the break and Shanghai was down 0.8 percent while Seoul, Singapore and Manila were all in negative territory.

Sydney and Wellington were closed for the ANZAC Day public holiday.

Oil prices slipped more than one percent as persistent worries over a global supply glut weigh against hopes China's growth slowdown may be ending and talk that major producers will work towards agreeing output limits.

Attention this week will be in the BoJ and Fed policy meetings, with expectations the Japanese will unveil fresh stimulus measures following this month's double earthquake that threatens an already weak economy.

US officials are also due to release first-quarter growth figures, which will provide an idea about the state of the world's number one economy.

- Key figures around 0400 GMT -

Tokyo - Nikkei 225: DOWN 0.6 percent at 17,461.15

Shanghai - Composite: DOWN 0.8 percent at 2,935.03 (break)

Hong Kong - Hang Seng: DOWN 0.6 percent at 21,344.65 (break)

Euro/dollar: DOWN at $1.1243 from $1.1224 Friday

Dollar/yen: UP at 111.18 yen from 111.80 yen

New York - Dow: UP 0.1 percent at 18,003.75 (close)

London - FTSE 100: DOWN 1.1 percent at 6,310.44 (close)