TOKYO – Asian stocks sagged Wednesday as pessimism about global growth spread following a decline on Wall Street overnight and a strengthening yen, which dampened prospects for export-oriented Japan.
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KEEPING SCORE: The Nikkei 225, the benchmark for the Tokyo Stock Exchange, lost 1.3 percent to 15,593.23 in morning trading. Hong Kong's Hang Seng trimmed nearly 1 percent to 23,198.44, while South Korea's Kospi was little changed at 1,973.50 after regaining earlier losses. Sydney, Singapore and Taiwan also declined.
GROWTH WORRIES: Market players were turning less upbeat about the future of global economies after the IMF trimmed its outlook for this year and next, mostly because of weaker expansions in Japan, Latin America and Europe. The IMF expects the global economy will grow 3.3 percent this year, slightly below what it forecast in July.
LOOKING AHEAD: The U.S. Federal Reserve is due to release notes on its latest meeting on Wednesday. Investors will be looking for signs of when the Fed might raise interest rates. The first rate increase is not expected until mid-2015.
ANALYST TAKE: Takuya Takahashi, strategist at Daiwa Securities Co. in Tokyo, said a number of factors were at work, including the decline on the U.S. market and signs of the German economy slowing down. "Concerns about the world economy are working to push stock prices down," he said. "I was expecting them to go down even further." But he said players were taking a wait-and-see attitude ahead of comments from the Fed and earnings from U.D. companies.
WALL STREET: The Standard & Poor's 500 index fell 1.5 percent to close at 1,935.10. The Dow Jones industrial average dropped 1.6 percent to 16,719.39. The Nasdaq composite fell 1.6 percent to 4,385.20.
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GERMAN INDUSTRY: German industrial output fell 4 percent in August, far more than expected. The slump follows other disappointing economic reports and suggests Europe's economy will not recover as strongly as hoped in the third quarter, keeping a lid on the 18-country eurozone.
EUROPE: Germany's DAX finished 1.3 percent lower and France's CAC-40 lost 1.8 percent. Britain's FTSE 100 declined 1 percent.
ENERGY: Benchmark U.S. crude fell 37 cents to $88.48 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 38 cents to close at $91.73 on the ICE Futures exchange in London.
CURRENCIES: The euro rose to $1.2648 from $1.2630. The dollar was trading at 108.28 yen, down from 108.61 yen.