US stocks fall sharply on China growth worries

Yahoo! said it will go ahead despite a risk of a multi-billion dollar tax bill after the U.S. Internal Revenue Service denied its request to considered tax free deal.

Japan’s Nikkei brushed aside an unexpected drop in the country’s industrial output to gain 1.8 percent.

China’s blue-chip CSI300 index.CSI300 and the Shanghai Composite Index.SSEC were down 2 per cent and 1.9 percent respectively in afternoon trading.

Analysts questioned the strength of the equity market’s rally, which was helped by a Chinese tax cut on small cars aimed at reviving sales in the world’s biggest auto market. The losses followed a near 30 percent plunge in its London-listed arm after online brokerage Investec warned about the impact of soft commodity prices on the group.

“Really a quiet day apart from the health-care side”, said Ben Jang, portfolio manager at Nicola Wealth Management in Vancouver. “We’re getting a real snapback”.

Elsewhere in the Asia Pacific region: New Zealand’s NZX50 fell 1.5% to 5612.32.

“Whether it can hold, that’s been the problem”, he said.

The Nikkei in Japan, down 4% yesterday, has gained almost 2% today, rocketing higher on the back of bargain hunting and short covering. The benchmark NZX-50 index fell 86.71 points or 1.52 percent to 5,612.42.

The losses dragged all Asia’s bourses lower. The Dow Jones industrial average lost 186 points, or 1.1 percent, to 16,128.

In Europe, Germany’s DAX rose 0.2 percent to 9,504 while the CAC-40 in France was steady at 4,357.

Selling in biotech and technology stocks continued in the United States, sending the Russell 2000 Index to its longest slump since 2006 and briefly pushing the Nasdaq Composite below its August close. It posted a 19.8 loss for the quarter.

Shares in market bellwether BHP Billiton slumped 6% on concerns over persistently low commodity prices and the dramatic plunge in rival Glencore’s market value on 28 September in London. Sydney jumped 2.10 percent and Seoul, which was closed on Monday and Tuesday for a holiday, ended 1.03 percent higher. “Meanwhile, the message from the Fed seems to be consistent, with New York Fed president Dudley sticking to the “we would like to raise rates this year” narrative”. The euro fell on a report euro zone inflation had turned negative. Federal Reserve Chair Janet Yellen said Thursday the central bank remains likely to boost interest rates this year.

Focus now turns to this Friday’s all-important USA non-farm payrolls as the markets try to gauge whether labor market conditions are strong enough for the Fed to tighten monetary policy.

According to data, now the USA 10-year note stood at 2.098 percent.

The yield on German Bunds were steady at 0.59 percent.

Crude oil futures dipped after U.S. inventories showed a weekly buildup that far exceeded analysts’ expectations.

West Texas Intermediate crude fell 0.8 per cent to US$44.85 a barrel. Both indices slid 24 percent over the third quarter.

On the economic front, an indicator which measures confidence among Japan’s small and medium-sized enterprises, increased unexpectedly in September, figures released by the Shoko Chukin Bank showed with the corresponding index rising by 0.2 percentage points to 49.0 from 48.8 in the previous month. It last traded at US$4,945, within reach of a 6 1/2-year low below US$4,855.