Asia markets broadly lower, Singapore shares slump 0.93%

Asia markets broadly lower, Singapore shares slump 0.93%

Asia markets were broadly lower on Friday, adopting the same risk-off sentiment that saw US equities sell off overnight, with financials leading the decline amid renewed concerns over global growth and the effectiveness of central bank policy.

The Straits Times Index in Singapore slumped 0.93 per cent, or 26.21 points, to 2,787.38, according to The Business Times.

Australia's ASX 200 was off 1.1 per cent in morning trade, weighed by a 1.46 per cent loss in the heavily-weighted financial subindex. The country's so-called Big Four banks - ANZ, Commonwealth Bank of Australia, NAB and Westpac - sold off between 1.18 and 2.17 per cent.

Japan's benchmark Nikkei 225 was down 1.26 per cent, while across the Korean Strait, the Kospi fell 0.84 per cent.

"It's been a distinctly 'risk-off' night," said Ray Attrill, global co-head of foreign exchange strategy at the National Australia Bank, in a morning note, adding financial stocks took a beating overnight.

"Increased dissolution about what central policies will continue to do to financial sector profitability may be a factor here," he said, adding, "as too investors bracing for the Q1 earnings season (that kicks off in earnest on Monday) and where the banks are anticipated to reveal a truly rotten start to the year."

Major stock indexes in the US closed down, with the Dow Jones industrial average off 0.98 per cent, the S&P 500 finishing down 1.2 per cent and the Nasdaq composite 1.47 per cent lower.

In the currency market, the dollar index, which measures the US dollar against a basket of currencies, advanced 0.12 per cent to 94.59 as of 8:28 a.m. HK/SIN time.

Down Under, the Australian dollar traded at $0.7519, after trading as high as $0.7637 on Thursday.

But the focus is on the Japanese yen, which remained at its strongest level against the greenback since October 2014. The dollar/yen pair fell as low as 107.67 overnight, before recovering to 108.72 in the morning local time.

Alarm bells on yen?

Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, said in a note that the yen's appreciation spelled big trouble for Japan's businesses and economy.

"Alarms should be ringing at the Ministry of Finance and Bank of Japan," she said. "However, everything that we have heard from the Japanese government so far suggests that they are not ready to intervene in the foreign exchange market to lower the value of their currency."

Lien added that it was becoming clear that the Japanese central bank "could allow dollar/yen to fall to 105 and maybe even 100 before taking action."

Major Japanese exporters were mostly lower in morning trade, with shares of Toyota down 1.51 per cent, Honda off 0.65 per cent and Sony losing 1.7 per cent. A stronger yen is a negative for exporters as it affects their overseas profits when converted into local currency.

In corporate news, shares of the heavily-weighted Japanese retailer Fast Retailing slumped 9.05 per cent, after the company trimmed its outlook on Thursday. Reuters reported that Fast Retailing's quarterly profits were hurt by price cuts at its clothing chain Uniqlo.

In its fiscal second quarter through February, Fast Retailing reported an operating profit of 23.4 billion yen ($215 million), down from 58.7 billion in the same period a year ago, and said it expected operating profit for the full year through end-August to be at 120 billion yen compared to a previous outlook of 180 billion yen in January, said Reuters.

Overnight oil prices retreated after data showed higher weekly inventories at the US crude storage base.

Reuters said market intelligence firm Genscape reported a build of 255,804 barrels at the Cushing, Oklahoma, delivery hub for US crude futures in the week to Tuesday.

US crude futures finished down 49 cents at $37.26 a barrel. Global benchmark Brent futures were lower about 1 per cent to $39.43.

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