LONDON (ShareCast) - Falling commodity prices and fresh concern about economic growth prompted a broad sell-off in Japan and sent the benchmark Nikkei 225 (news) down 2.8%.
Unease about
recent optimism about a global recovery and the strengthening yen weighed on buyer appetite. Key (NYSE:
KEY -
news) exporters
Toyota and
Sony (Munich: 853687 - news) were both down nearly 3% in Tokyo.
The benchmark Nikkei fell 286 points to 9,752 in Tokyo. On Friday the index hit an eight month closing high of 10,135.
Nerves about economic growth prospects kept buyers away following weaker than expected US data. The Empire State index's measure of manufacturing in the New York area fell 5 points to -9.4 in June. In the prior month, the index was -4.55.
Profit taking after recent gains also weighed on the Nikkei Tuesday.
As expected the Bank of Japan left the overnight lending rate at 0.1% and raised its view of the economy for a second consecutive month following data showing an improvement in imports and exports.
In an online statement the Bank of Japan said, "Japan's economic conditions, after deteriorating significantly, have begun to stop worsening...In the coming months, Japan's economy is likely to show clearer evidence of leveling out over time."
Hong Kong's Hang Seng (news) index plummeted Tuesday with heavyweight resource stocks like PetroChina falling over 4% while Cnooc (0883.HK - news) fell 5.5%. A drop in US crude prices weighed on energy stocks.
Disappointing US data on Monday also spooked investors and wiped the shine off recent optimism about economic recovery.
Aluminum Corp of China or Chalco fell 5% while Angang Steel dropped 5.4%.
Financials also came under pressure with shares in HSBC (LSE: HSBA.L - news) down 3% and Bank of China off 1.3%.
China Mobile (0941.HK - news) and China Life were also around 2% lower.
The Hang Seng index slumped 336 points to 18,162.
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