By Willa Plank
Toshiba plummets again; financials weigh on Hong Kong index
Major Asian markets were broadly lower Thursday following declines on Wall Street.
"It's largely a response to a negative U.S. session [but] volumes are so thin it's hard to read into any particular move," said Alex Furber, sales trader at CMC Markets.
Australia's S&P/ASX 200 was off 0.1% and Taiwan's Taiex was lower by 0.1%.
Overnight, the S&P 500 fell 0.8% and the Dow Jones Industrial Average was 0.6%, falling further away from the 20,000 milestone.
"The decline in the U.S. markets weighed on sentiment today," said Alexander Lee, a strategist at DBS Vickers in Hong Kong.
Japan's Nikkei was down 1% as the yen strengthened 0.3% against the U.S. dollar. A stronger yen hurts Japan's exporters.
Shares of Toshiba (6502.TO) were down 15%, hit by continuing concerns about write-downs in the nuclear business.
Tomoichiro Kubota, senior market analyst at Matsui Securities, says the shares were falling because it's unclear how much write-down Toshiba would have to record and how much Toshiba would need to raise to restore its capital base. Toshiba said the write-down could amount to several hundred billion yen, or several billion dollars.
Toshiba is on a Tokyo Stock Exchange watch list because of its accounting scandal in 2015, when the firm was found to have overstated operating profits by at least 151.8 billion yen between 2008 and 2014.
The fact it is on a watch list makes it difficult to raise funds by issuing new shares to the public, market participants say. Japanese media also reported that Toshiba was going to discuss possible financial support with its banks, including a debt-for-equity swap.
Korea's Kospi was down 0.2% as South Korea's government cut its growth forecast for next year. The 2017 gross domestic product growth estimate for South Korea was lowered to 2.6% from an earlier projection of 3%.
Weakening domestic demand will likely be a major drag on Korea's economy in 2017, South Korea's Ministry of Strategy and Finance said, with growing household debt, continuing corporate restructuring and cooling home construction expected to keep weighing on consumer spending and growth.
The Shanghai Composite Index was down 0.2%, and Hong Kong's Hang Seng Index declined 0.3%, with declines in financial stocks like China Construction Bank (0939.HK) weighing down the market.
(END) Dow Jones Newswires
December 28, 2016 22:35 ET (03:35 GMT)
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