Asian stocks extend losses amid economic jitters, Japan political uncertainty; Europe flat

Asia stocks fall amid economy jitters; Europe flat

HONG KONG — Asian markets extended their slide Monday as hopes for a strong economic turnaround continued to fade amid new political uncertainty in Japan and worries over earnings results from major U.S. companies. European markets were little changed in early trade.

Every major across Asia market dropped, with Japan’s index racking up its ninth straight loss as the country’s embattled prime minister moved to dissolve parliament and call general elections for next month. Oil prices resumed their two week sell-off to fall toward $59 a barrel.

Renewed anxiety about the pace of recovery in the world economy has kept stocks from rallying further after huge gains between March and June.

Investors are now looking to second-quarter corporate earnings and profit outlooks for the year, to be issued in the coming weeks, for guidance about the economy’s prospects. This week brings results from U.S. bellwethers like Citigroup Inc., Intel Corp. and General Electric Co.

Unless corporate profits and major economies show more evidence of healing, markets could be hard pressed to move higher for now.

“Most people are fairly cautious, they think it’s been a bit too much too soon,” said Daniel McCormack, a strategist for Macquarie Securities in Hong Kong. “If economic data doesn’t keep improving we could continue to drift off from here.”

European shares opened lower before recouping their losses to trade mostly sideways, with Britain’s FTSE up 0.1 percent, Germany’s DAX gaining 0.2 percent and France’s CAC 40 flat. Wall Street futures pointed to more losses on Monday. Dow futures were down 30, or 0.4 percent, at 8,055 and S&P futures fell 3.1, or 0.4 percent, at 871.20.

In Japan, the Nikkei 225 stock average tumbled 236.95 points, or 2.6 percent, to 9,050.33.

Tokyo’s market opened lower, but selling accelerated in the afternoon amid reports that Prime Minister Taro Aso will likely dissolve the powerful lower house next week and that national elections would take place Aug. 30.

That nearly six-week gap was too long for comfort, analysts said.

“Japan will essentially be without a government during that time,” said Masayoshi Okamoto, head of dealing at Jujiya Securities in Tokyo. “So investors are trimming their holdings as a precaution against the political vacuum. If something happens, the country may not be able to immediately respond.”

Hong Kong’s Hang Seng shed 453.79, or 2.6 percent, to 17254.63, while South Korea’s Kospi dived 3.5 percent to 1,378.12.

Elsewhere, Taiwan’s market dropped 3.5 percent as investors worried that a partial free trade agreement with mainland China would be delayed until next year.

Australia’s index lost 1.5 percent and India’s benchmark was down 1.7 percent. Shanghai’s main stock measure lost 1.1 percent.

Trade on Wall Street Friday was uninspiring amid jitters about earnings and as a survey showed U.S. consumer confidence falling to its lowest level since March

Few expect companies to shine in the April-June quarter. Analysts polled by Thomson Financial forecast that S&P 500 companies’ earnings dropped an average 35.5 percent in the period from a year earlier after falling the same amount in the first quarter.

Instead, many investors will be eying company forecasts to help determine whether hopes for a faster rebound in economic growth, as reflected in prices from the spring rally, are justified or overwrought.

The Dow fell 36.65, or 0.5 percent, to 8,146.52, the lowest close for the blue chips since April 28.

The broader S&P 500 index lost 3.55, or 0.4 percent, to 879.13, while the Nasdaq composite index rose 3.48, or 0.2 percent, to 1,756.03.

Oil prices slid in Asia trade, with benchmark crude for August delivery down 58 cents to $59.31 a barrel. The contract fell 52 cents to settle at $59.89.

The dollar weakened to 92.29 yen from 92.43 yen, while the euro traded slightly lower at $1.3937 from $1.3944.

AP Writer Tomoko A. Hosaka contributed to this report from Toyko.