Japanese stocks fell as a rout in U.S. and European equities on Friday spread to Asia. Energy explorers led declines.
The Topix index dropped 1.8 percent to 1,521.62 as of 9:01 a.m., heading for its lowest close since Oct. 22, as all of its 33 industry groups declined. The Nikkei 225 Stock Average lost 1.7 percent to 18,896.42. U.S. and European stocks slumped at the end of last week as a rout in oil prices and ructions in the junk-bond market boosted investor anxiety ahead of the Federal Reserve’s final meeting of 2015.
E-mini futures on the Standard & Poor’s 500 Index added 0.1 percent after the underlying measure dropped 1.9 percent on Friday to cap the worst week for U.S. stocks since August. The Stoxx Europe 600 Index fell 2 percent.
A wave of risk aversion swept over markets Friday as OPEC’s decision to scrap output limits sent crude oil prices to the lowest level since 2008 in London. Asset managers slid in the U.S. after a high-yield mutual fund run by Third Avenue Management suspended redemptions. They were then joined by Stone Lion Capital Partners, fueling concern over stress in the high-risk debt market.
The credit-market turmoil comes as traders price in 74 percent odds that the Fed will raise interest rates on Wednesday, ending the era of near-zero borrowing costs. Tightening policy would solidify the Fed’s divergence from other major central banks, with policy makers in Europe and Japan still emphasizing measures to support growth.
The Bank of Japan’s fourth-quarter Tankan survey showed a measure of confidence among large manufacturers held at 12, beating economist estimates for it to slip to 11.
Source : Bloomberg