Hong Kong, Mainland Markets Join Asian Retreat

Hong Kong stocks ended the morning in negative territory on Thursday following losses on Wall Street, with energy firms hit by another drop in oil prices.

The Hang Seng Index fell 0.5 percent, to 28,453 by the break.

On the mainland, the Shanghai Composite Index shed 0.7 percent, to 2,912 while the Shenzhen Composite Index slumped 1.2 percent, to 1,555.

Most other Asian markets fell, hit by concerns about the uncertain global economic outlook and tepid corporate earnings reports.

The losses followed a negative lead from Wall Street, where big-name firms including Caterpillar and United Technology sank on weak corporate reports.

"Stocks' strong gains are finally succumbing to profit-taking," Alec Young at FTSE Russell told Bloomberg News.

"Earnings and guidance so far have been mixed and, given the big run-up, it's no surprise there's little investor tolerance for even a hint of disappointment."

Tokyo ended the morning 1.6 percent lower, hit by a stronger yen and data showing another drop in exports as Japan feels the impact of falling demand and global trade uncertainty.

Sydney and Singapore both lost 0.3 percent, Seoul fell 0.5 percent and Taipei was off 0.1 percent. However, Wellington and Manila eked out small gains.

The US dollar fell against its main peers and most high-yielding currencies, having enjoyed a recent rally, on concerns about the length and depth of expected Fed rate cuts.

Adding to dollar selling were comments from the International Monetary Fund that the US unit is overvalued by up to 12 percent based on current economic fundamentals. (AFP)

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