CANBERA (dpa-AFX) - Most Asian stocks fell on Wednesday, with Hong Kong and Japanese markets leading regional declines, as a slew of negative headlines related to the Italian banking system and renewed fears about the uncertainty surrounding so-called Brexit sent shockwaves across global financial markets.
The pound sank to three-decade lows, oil extended steep overnight losses and copper hovered below two-month high, while gold touched its highest level since March 2014 on concerns the fallout from last month's Brexit vote is gathering pace.
Yields on U.S. Treasuries hit record lows and the safe-haven Japanese yen held near two-week highs against the euro, dollar and the Swiss franc after the Bank of England warned that the financial risks related to Brexit are emerging.
Three British commercial property funds worth about 10 billion pounds suspended trading following an increase in redemption requests because of the high levels of uncertainty in the commercial property market since the outcome of the European Union referendum.
Chinese shares extended gains for the fourth day even as the yuan hit fresh 5-1/2 year lows, continuing its slide for the fifth straight session. The benchmark Shanghai Composite rose 10.90 points or 0.36 percent to 3,017.29.
Hong Kong's Hang Seng index dropped 255.43 points or 1.23 percent to 20,495.29.
China on Tuesday revised the method of calculating its GDP for the second time in less than a year by adding research and development (R&D) spending to better reflect the role of innovation to growth.
Japanese shares fell to more than one-week lows as the yen continued its strengthening trend on global risk aversion sparked by Brexit fears. The Nikkei average fell 290.34 points or 1.85 percent to 15,378.99, its lowest level since June 28, dragged down by exporters, banks and brokerages. The broader Topix index closed 1.79 percent lower at 1,234.20.
Canon, Honda Motor, Mitsubishi UFJ Financial, Panasonic, Sumitomo Mitsui Financial, Nomura Holdings, Toshiba and Toyota Motor retreated 2-4 percent. Mazda Motor slumped 6.1 percent on news that its joint venture in China will recall more than 74,000 sedans to replace Takata Corp. airbags.
Energy stocks Inpex, JX Holdings and Japan Petroleum, market heavyweight Fast Retailing, robot maker Fanuc and mobile carrier SoftBank Group dropped 2-3 percent.
Australian shares fell for a second day as the economic fallout from Brexit vote continued and Italy's banking crisis added to political uncertainty at home. The S&P/ASX 200 index fell 30.50 points or 0.58 percent to 5,197.50 and the broader All Ordinaries index closed 28.10 points or 0.53 percent lower at 5,284.70.
The big four banks fell between 0.6 percent and 1.9 percent while mining giants Rio Tinto and BHP Billiton lost 2 percent and 3.8 percent, respectively. Santos tumbled 3.2 percent and Origin Energy slumped 4.5 percent after U.S. crude oil prices fell about 5 percent overnight on growing worries about the outlook for the world economy and data showing rising OPEC output in June.
Fantastic Holdings plummeted 5.4 percent after announcing it would close its Le Cornu furniture business over the next six months. Gold miners Evolution, Newcrest, Northern Star Resources and Regis Resources climbed 3-6 percent after gold prices hit a two-year high overnight.
Seoul shares plunged and the local currency lost ground against the dollar for a third consecutive session, as the fallout from the Brexit vote prompted foreigners to lock in some recent gains. The benchmark Kospi dropped 36.73 points or 1.85 percent to 1,953.12, tracking losses in the U.S. and European markets overnight. Both Samsung Electronics and Hyundai Motor lost over 3 percent.
New Zealand shares eked out modest gains despite weak global cues. The benchmark S&P/NZX 50 inched up 6.24 points or 0.09 percent to 6,977.23. Trade Me Group rose 1.9 percent as analysts at Deutsche Bank raised their target price on the stock.
New Zealand Refining, Contact Energy and Spark New Zealand rose over 1 percent each. Sky Network Television dropped 1.3 percent after its shareholders voted in favor of the proposed merger with Vodafone New Zealand.
Markets in Malaysia, Singapore, India and Indonesia were closed for Eid-ul-Fitr. The Taiwan Weighted tumbled 1.6 percent amid growing nervousness in global markets.
U.S. stocks snapped a four-session winning streak on Tuesday and bond yields hit record lows as investors fretted over the health of the British financial system and Italian banks.
Oil prices tumbled and new orders for U.S. factory goods fell in May on weak demand, further weighing on investor sentiment. The Dow slid 0.6 percent, the tech-heavy Nasdaq dropped 0.8 percent and the S&P 500 declined 0.7 percent.
European stocks extended declines for a third day on Wednesday, with banks suffering heavy losses, after the Bank of England warned that the financial risks of Brexit "have begun to crystallize".
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