Morose Mood: "We're Entering a Bear Market Now"

SINGAPORE -- Asian stock markets were lower Tuesday, weighed by losses on Wall Street Monday as well as concerns over the pace of global economic growth. In Japan, the Nikkei Stock Average slumped to a 15-month low as exporters' stocks were clobbered by the yen's strength.
"Fear has struck back into the hearts of equity investors. It is the probability of a second (global economic) dip that is in their minds," said head of SIAS Research Roger Tan in Singapore.
Japan's Nikkei Stock Average was down 1.4% at 8,987.89, Australia's S&P/ASX 200 was down 0.6%, South Korea's Kospi Composite shed 1.0% and New Zealand's NZX-50 slipped 0.1%. Dow Jones Industrial Average futures were down 32 points in screen trade.
Traders will be closely watching U.S. existing home sales data due later on Tuesday as well as revisions to second-quarter U.S. gross domestic product due Friday.
Economists expect to see the initial GDP estimate of a 2.4% advance cut down significantly, toward a much more modest 1.3% gain, as national output highlights the toll of a recent string of subpar data.
In Japan, the Nikkei Stock Average broke below the 9,000 level for the first time since May 18, 2009 as exporters' stocks were pounded as the yen hit multi-week highs against the U.S. dollar and the euro.
"There is a sense of resignation and we're all just watching how far stocks will fall," said Kenichi Hirano, operating officer at Tachibana Securities. "We're entering a bear market now."
Losses were broad based with 32 of the Topix's 33 subindexes lower. Tokyo Electron shed 2.6%, Sony lost 2.7% and Canon fell 1.7%. Defensive issues outperformed with Astellas Pharma up 0.7% after a ratings upgrade from Credit Suisse.
In Sydney, banks and resource stocks were weighing on the market, with BHP Billiton down 1.1%, Rio Tinto down 0.6% and Westpac down 0.9%. Some stocks also traded ex-dividend, further dragging the headline index lower.
Sentiment was also hurt by an uncertain outlook for companies. "Headline (earnings) numbers have been okay but the biggest issue continues to be the lack of informative and detailed outlooks and the confidence in the outlook statements is pretty soggy, although the market is trying to bounce off its lows at the moment. It's been a pretty disappointing reporting season," said RBS head of Sydney sales trading, Justin Gallagher.
"I think it's just a recycling of the double-dip (recession scenario). The economic data is certainly not showing any upwards momentum--if anything it's tempering."
Foster's dropped 3.4% after its 7% rise Monday on speculation of a bid for its beer assets. It reported full-year net profit of 698.3 million Australian dollars (US$620 million) excluding writedowns on its wine assets Tuesday. That compared with expectations for a net profit of A$673.6 million, according to a Dow Jones Newswires poll of six analysts.
IG Markets said the underlying result was "strong," but the lack of a final dividend could weigh on the stock.
Australia's political uncertainty also continued to cool the mood in the Sydney market. While the hung parliament will "hit local markets for a time," the long-run impact will be small, said Capital Economics in a note.
"The main political parties have similar fiscal consolidation objectives and the proposed mining tax will either be scrapped or watered down. More broadly, Asia's demand for commodities should stay high while (Reserve Bank of Australia) tightening, we judge, is not over."
In Seoul, the technology and steel sectors weighed on the market as investors worried about an economic slowdown with Samsung Electronics down 1.7% and Posco down 1.7% on profit-taking.
Hyundai Motor rose 1.1% and Kia Motors gained 0.5% on bargain hunting after its losses on Monday. Ssangyong Motor shed 2.8% after surging 6.9% the previous day on news it had signed a memorandum of understanding with India's Mahindra & Mahindra to sell the latter a controlling stake.
In foreign exchange markets, the Japanese yen hit multi-week highs against the U.S. dollar and the euro, lifted by safe-haven demand amid concerns about the pace of global economic growth. Those concerns were underscored by a weak preliminary reading for the euro-zone's purchasing managers index.
The composite PMI slipped to 56.1 in August, the lowest level in two months and down from 56.7 in July.
The euro was at $1.2632 against the dollar, after touching $1.2630 earlier, its lowest level since July 13. That compared with $1.2665 in late New York trade Monday. The single currency bought Y107.46, compared with Y107.95 in New York; it touched Y107.61 earlier, its lowest since July 1. The dollar was at Y85.13, from Y85.25 in New York.
Safe-haven demand lifted Japanese government bonds, with the lead September bond futures up 0.16 at 142.99 points.
Spot gold was at $1,227.80 per troy ounce, down 20 cents from late New York trade. October Nymex crude oil futures were down 32 cents at $72.78 per barrel.