(MENAFN- AFP) Asia extended a global stock market sell-off Wednesday following sharp losses in New York and Europe as fresh fears over the global economy sparked a flight to safe investments.
After enjoying a healthy run of recent gains, traders have been spooked by a string of disappointing data from China to Europe and the United States that led them to question whether hopes of a nascent recovery were overdone.
The losses were compounded in Sydney, where mining giant BHP Billiton plunged more then eight percent on news that Brazilian prosecutors had slapped it with a $43 billion lawsuit over November's deadly Samarco dam disaster.
In early trade, Hong Kong and Singapore were each off one percent, while Sydney shed 1.3 percent.
Seoul shed 0.6 percent and Taipei eased 0.8 percent. There were also big losses in Manila and Jakarta.
Shanghai flitted between gains and losses, however, after Chinese authorities hinted at unveiling measures to support the country's stock markets.
Tokyo was closed for a public holiday.
The losses came after Wall Street and Europe's main indexes were flooded in red ink.
On Tuesday, the European Union cut its eurozone growth forecasts for this year, warning that global risks including the slowdown in China and the danger of Britain leaving the EU were having a damaging effect.
The news was the latest of a flurry of data highlighting weaknesses in the global economy, including a shrinkage or slowdown of manufacturing activity in China, Britain and the United States.
- Dollar rallies -
Last week, Washington said US consumer spending barely increased last month while the world's number one economy expanded in the first quarter at a much slower rate than expected.
"The continued narrative is that the global economy is not very strong, even if the US is the best of the bunch," Joe Bell, a Cincinnati-based senior equity analyst at Schaeffer's Investment Research, told Bloomberg News.
"We've had such a strong run-up over the last few months that we're in a bit of a consolidation phase."
Panic selling also hit currency markets where higher yielding, or riskier, emerging market units took a belting against the dollar.
The Australian dollar plunged more than one percent, extending losses from Tuesday when it was hit by a shock interest rate cut by the country's central bank. The Aussie has fallen around three percent in the past two days.
The greenback also rallied 1.2 percent against the South Korean won, 1.3 percent against the Canadian dollar and 1.2 percent versus the Malaysian ringgit. Indonesia's rupiah and the Singapore dollar were also down about 0.6 percent.
Comments from Federal Reserve officials suggesting the US central bank could hike interest rates as soon as next month also provided support to the greenback against the yen after plummeting over the past month.
The dollar was at 107.12 yen in early trade, compared with Tuesday's low of around 105.50 yen, which was the weakest in 18 months.
However, the greenback is still down nearly 13 percent against the safe haven Japanese unit after the Fed last month tempered expectations of a rate hike any time soon and the Bank of Japan held off loosening monetary policy.
- Key figures around 0230 GMT -
Hong Kong - DOWN 1.0 percent at 20,466.57
Shanghai - DOWN 0.1 percent at 2,989.96
Tokyo - Nikkei 225: Closed for public holiday
Euro/dollar: DOWN at $1.1506 from $1.1507 Tuesday
Dollar/yen: UP at 107.12 yen from 106.63 yen
New York - Dow: DOWN 0.8 percent at 17,750.91 (close)
London - FTSE 100: DOWN 0.9 percent at 6,185.59 (close)
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