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Asia Stocks
Stock Selloff Spreads in Asia
From the Wall Street Journal of Mon, 15 Dec 2014 23:24:59 EST

A selloff in emerging markets, a rate rise by Russia and falling oil prices sent Asia stocks lower Tuesday, while in China, markets factored in a slightly worse-than-expected reading on manufacturing activity.

The export-heavy Nikkei Stock Average, leading losses in the region, was off by more than 2% at 16745.77 as falling oil prices pushed up the Japanese yen. Japanese yen futures can be bought as a hedging tool to reduce risk amid heightened uncertainty and volatility from a tumbling oil market.

The U.S. dollar traded at ¥117.71, down from ¥117.82 late Monday in New York. A weaker dollar hurts Japanese exporters that repatriate U.S. dollar earnings from abroad.

In Hong Kong, the Hang Seng Index was 1.1% lower at 22770.31, after HSBC ’s preliminary reading on factory activity for December came in at 49.5, compared with last month’s 50.0. Economists had expected the indicator to stay put, at a six-month low.

The Shanghai Composite Index was up 0.2% at 2957.41, amid some expectations that contracting manufacturing activity could spur support for more easing and fiscal stimulus.

A number of other factors added to jitters in the region—in Indonesia, traders say the central bank is intervening to prop up the rupiah, which plunged to its lowest level since 1998 yesterday. The currency weakened further to 12,879.5 against the U.S. dollar Tuesday, after touching 12,695 Monday.

Asia has been relatively resilient this year compared with other emerging markets, although analysts warn that markets in India and Southeast Asia are getting more expensive. Markets across the developing world fell Monday, underscoring expectations that a statement by the U.S. Federal Reserve Wednesday on its policy outlook could pressure investors to sell out of riskier markets.

In response to the threat of inflation from volatility in the oil market, Russia’s central bankraised its key interest rate Tuesday to 17% from 10.5%.

Shares of Hong Kong-listed United Co. Rusal PLC, a Moscow-based aluminum producer, fell 3.5%, on the back of the rate hike and amid worries that the decline of oil prices will also pull down the price of aluminum. Most of the company’s debt is ruble-denominated.

Australia’s S&P ASX 200 was last down 0.3% to 5170.40. Stocks there have already gotten beaten up by a supply glut in oil, the price of which fell for the fourth straight session overnight to $55.91 a barrel, the lowest level since May 2009 on the New York Mercantile Exchange.

Elsewhere in Asia Pacific, Korea’s Kospi was down 0.5% to 1911.31.

—Gregor Stuart Hunter contributed to this article.

Write to Chao Deng at

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