Asian markets take heavy losses Australian retail sentiment down

Asian shares fell as expected, extending the global stock-market selloff to six days and regional currencies sank on concern the U.S. recovery is faltering. The MSCI Asia Pacific Index lost 2.2 percent as of 2:01 p.m. in Tokyo. Standard & Poor’s 500 futures rose 0.1 percent after a seven-day drop that erased the U.S. gauge’s 2011 gains. Ten-year Treasury yields declined to 2.58 percent and the rate on Australian 10-year debt reached a two-year low. The won fell the most in three weeks, while Australia’s dollar sank to a two- week low.

MSCI’s Asian index was headed for its biggest loss since May 23, as Japan’s Nikkei 225 Stock Average retreated 2 percent and South Korea’s Kospi index tumbled 2.6 percent.

China’s Dagong Global Credit Rating Co. cut the credit rating for the U.S. to A from A+ with a negative outlook. Moody’s maintained its AAA credit rating for the U.S. but changed its outlook to negative.

In other regional reaction, Governor Zhou Xiaochuan said China’s central bank will monitor U.S. efforts to tackle its debt while the official Chinese news agency criticized brinksmanship of American lawmakers.

In Australia, retail sales fell 0.1 per cent to a seasonally adjusted $20.54 billion in June from $20.57bn in May, the Australian Bureau of Statistics said today. Economists expected a monthly rise of 0.3 per cent. Quarterly sales rose 0.3 per cent in the second quarter, when compared to Q1, in chain volume terms, as the market had forecast. Shares in Australian discretionary retailers including Myer and JB Hi-Fi were flat on the news despite the overall market fall.

Crude for September delivery in New York fell 0.3 percent to US$93.49 a barrel, following a three-day, 3.8 percent tumble. Futures are set for the longest losing streak since May as investors bet the slowing U.S. economy may dent demand in the world’s biggest crude consuming nation. U.S. crude inventories declined 3.31 million barrels to 354.9 million, the American Petroleum Institute said yesterday. Immediate-delivery gold retreated 0.2 percent to US$1,658 an ounce.

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