Global growth worries hit Asia stocks (ft.com)

By Stephen Smith

A bargain-hunting rebound for Asian stocks ebbed away on Wednesday as investor fears about the pace of economic recovery re-emerged as the main driver of sentiment.

The FTSE Asia-Pacific index snapped a two-day, 1.9 per cent bounce to drop 0.6 per cent to 217.02 as weak US service industries data sparked a return of risk aversion.

The pan-regional benchmark has dropped 12 per cent since mid-April. “The global consensus is that the economic recovery is slowing and we need a catalyst to boost market sentiment,” said Koichi Ogawa, of Daiwa SB Investments. “Investors can’t plan clearly whether to position defensively or to buy relatively cheap equities.”

Profit-taking dominated trading in Hong Kong with the Hang Seng index falling 1.3 per cent to 19,857.1 as shares that had seen big gains in the previous session dropped the most.

The index of mainland shares listed in the territory, or H shares, also tumbled 1.3 per cent to 11,305.2.

“Investors are looking toward Chinese economic data next week and so will prefer to book profit and wait and watch,” said Belle Liang, of Core Pacific-Yamaichi.

Those shares with big US export markets fell back on the disappointing service industries data. Foxconn International Holding, the world’s biggest contract maker of mobile phones, fell 2.2 per cent to HK$4.97 while Li & Fung, the world’s biggest supplier for retailers including Walmart, slipped 1.4 per cent to HK$34.55.

Large share offerings from mainland banks to replenish funds after a state-backed lending spree last year – highlighted by Agricultural Bank of China’s world-record $22.1bn IPO that priced this week – have been weighing on the H share market.

A report yesterday that Industrial and Commercial Bank of China, the nation’s biggest lender, may join Agricultural Bank and Bank of China in the fundraising rush with a $6.6bn rights offer saw its shares drop 1.4 per cent to HK$5.59.

Resource companies fell on plans by Beijing to impose a new tax on the extraction of coal, oil and gas.CNOOC, China’s biggest offshore oil explorer, dropped 2.8 per cent to HK$12.70 and PetroChina, the nation’s largest energy company, slipped 2.5 per cent to HK$8.53...

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