Asian markets chase Wall St down as global fears return

Asia extended a global stock market sell-off Wednesday following sharp losses in New York and Europe as fresh fears over the global economy sparked a flight to safe investments.

After enjoying a healthy run of recent gains, traders have been spooked by a string of disappointing data from China to Europe and the United States that led them to question whether hopes of a nascent recovery were overdone.

The losses were compounded in Sydney, where mining giant BHP Billiton plunged more than nine percent after Brazilian prosecutors slapped it with a $43 billion lawsuit over November's deadly Samarco dam disaster.

Sydney closed 1.5 percent down while Hong Kong ended down 0.7 percent. Seoul shed 0.5 percent and Singapore gave up 1.3 percent in late trade.

Taipei sank 1.3 percent while there were also big losses in Jakarta as first-quarter economic growth in Indonesia -- Southeast Asia's biggest economy -- missed forecasts.

Shanghai flitted between gains and losses after Chinese authorities hinted at unveiling measures to support the country's stock markets. The city's benchmark index ended 0.1 percent lower.

Tokyo was closed for a public holiday.

The losses came after Wall Street and Europe's main indexes were flooded in red ink. In early European trade Wednesday London dipped 0.1 percent, Frankfurt was flat and Paris fell 0.2 percent.

On Tuesday, the European Union cut its eurozone growth forecasts for this year, warning that global risks including the slowdown in China and the danger of Britain leaving the EU were having a damaging effect.

It was the latest in a flurry of data highlighting weaknesses in the global economy, including a shrinkage or slowdown of manufacturing activity in China, Britain and the United States.

- Dollar rallies -

Last week, Washington said US consumer spending barely increased last month while the world's number one economy expanded in the first quarter at a much slower rate than expected.

"The continued narrative is that the global economy is not very strong, even if the US is the best of the bunch," Joe Bell, a Cincinnati-based senior equity analyst at Schaeffer?s Investment Research, told Bloomberg News.

"We've had such a strong run-up over the last few months that we?re in a bit of a consolidation phase."

On currency markets the rush to safety saw higher yielding, or riskier, emerging market units take a belting against the dollar.

The Australian dollar plunged 0.7 percent, extending losses from Tuesday when it was hit by a shock interest rate cut by the country's central bank. The Aussie has fallen around three percent in the past two days.

The greenback also rallied 1.2 percent against the South Korean won, 1.2 percent against the Canadian dollar and 1.3 percent versus the Malaysian ringgit.

Comments from Federal Reserve officials suggesting the US central bank could hike interest rates as soon as next month also provided support to the greenback against the yen after plummeting over the past month.

The dollar was at 106.86 yen in afternoon trade, compared with Tuesday's low of around 105.50 yen, which was the weakest in 18 months. The US unit had risen to as high as 107.30 yen at one point.

However, the greenback is still down nearly 13 percent against the safe haven Japanese unit after the Fed last month tempered expectations of a rate hike any time soon and the Bank of Japan held off loosening monetary policy.

- Key figures around 0810 GMT -

Hong Kong: DOWN 0.7 percent at 20,525.83 (close)

Shanghai: DOWN 0.1 percent at 2,991.27 (close)

Tokyo: Nikkei 225: Closed for public holiday

London - FTSE 100: DOWN 0.1 percent at 6,180.46

Euro/dollar: DOWN at $1.1494 from $1.1507 Tuesday

Dollar/yen: UP at 106.86 yen from 106.63 yen

New York - Dow: DOWN 0.8 percent at 17,750.91 (close)