Asian stocks slumped Wednesday after heightened fears of U.S.-led military intervention in Syria sparked a selloff in global markets, with Philippine shares and the Indian rupee plunging amid worries about emerging markets. The Philippines's benchmark PSEi lost 3% during the session, on top of a 4% tumble the previous day. In afternoon trade, Thailand's SET lost 1%, while India's Sensex dropped 0.5% amid heavy losses for the rupee. "We expect the authorities in India and Indonesia, where current account deficits already exposed currencies to significant depreciation pressure from [the U.S. Federal Reserve's] taper fears ... to be challenged to keep the pressure from becoming disorderly today," said Tim Condon, a Singapore-based economist at ING Financial Markets Research. Indonesia's JSX Composite , down more than 3% earlier in the day, recovered sharply to rise 0.7% in choppy afternoon trade. Dow Jones Newswires cited Indonesia's finance minister Chatib Basri as saying the country's economy was estimated to grow 5.9% in 2013, and that the U.S. dollar was expected to average about 10,200 Indonesian rupiah this year. On Wednesday, the dollar was fetching about 10,900 rupiah, following a sharp recent weakness. Among the region's developed markets, Japan's Nikkei Stock Average finished the day 1.5% lower and Australia's S&P/ASX 200 dropped 1.1%, while Hong Kong's Hang Seng Index fell 1.6%. "Weaker equity markets around the world reflect a growing consensus that the West is likely to act in response to Syria's use of chemical weapons. ... Whether or not Western nations do take military action in coming days, there remains potential for the situation to escalate. Investors are unlikely to wind back risk premium quickly in these circumstances," said CMC Markets chief market analyst Ric Spooner. Elsewhere in Asia, South Korea's Kospi and China's Shanghai Composite slipped 0.1% each. The declines in Asia followed a 170-point, 1.1% drop Tuesday for the Dow Jones Industrial Average , with equities in the Middle East and Europe also slammed on worries over escalation in Syria, after government forces reportedly used chemical weapons against civilians amid the ongoing civil war. U.S. President Barack Obama is currently consulting with allies and members of the U.S. Congress on the response. Several analysts said the developments posed a new risk to global markets, but also advised investors against expecting a major impact on the global economy from a possible military confrontation. "This selloff is a clear knee-jerk reaction by global market participants who are clearly reducing risk over fears the situation in Syria could deteriorate substantially. It's just a typical case of irrational fear driving investors' decision making," said Rivkin Securities analyst Tim Radford. Wells Fargo Advisors chief international strategist Paul Christopher said any potential change in the balance of power in Syria's civil war poses a new uncertainty for financial and commodity markets, but it doesn't immediately threaten the global economy. Losses were spread across sectors in multiple markets, with internationally exposed firms in Japan also suffering as the U.S. dollar hovered around ¥97. Tokyo Steel Manufacturing Co. sank 8%, Suzuki Motor Corp. lost 5.4%, and Matsui Securities Co. fell 3% in Tokyo. Among loss leaders in Hong Kong, state-owned PetroChina Co. and its natural-gas-distribution unit Kunlun Energy Co. — both constituents of the Hang Seng Index — fell sharply as trading resumed after a halt Tuesday at the companies' request. PetroChina slumped 4.4%, and Kunlun dived 13.5%, after PetroChina said three of its senior executives, including the chairman of Kunlun, were under investigation by authorities for "severe disciplinary violations." PetroChina's Shanghai-listed shares dropped 0.5%. Several property developers also declined, with China Resources Land Ltd. shedding 3.3% in Hong Kong, while Gemdale Corp. dropped 2.6% and Poly Real Estate Group Co. shed 2.4% in Shanghai. Leading losses in Manila, shares of Ayala Land Inc. sank 4.7% and Jollibee Foods Corp. dropped 3.1%. In Mumbai, stocks declined as the rupee nosedived, touching a record low of 68.72 rupees to a U.S. dollar , compared with 66.19 rupees in the U.S. Business daily The Economic Times cited news agency reports as saying the Reserve Bank of India intervened in the currency markets to stem the rupee's weakness. Energy sector shares were hit hard amid worries the weakened rupee will bloat India's oil imports bill, with state-owned producer Oil & Natural Gas Corp. plunging 7.9%, while refiners Hindustan Petroleum Corp. and Bharat Petroleum Corp. sank 7% and 6.7%, respectively. In Australia, the resource sector saw weakness despite sharp gains for oil and gold futures overnight in the U.S. Diversified miner BHP Billiton Ltd. dropped 2.3%, and energy firm Santos Ltd. shed 1%. Shares of Woolworths Ltd. rose 2% after saying it expects subdued retail conditions in fiscal 2014, but projecting earnings growth of 4% to 7% from continuing operations for the year. Source : marketwatch
