Asian stocks held
near the day's lows on Wednesday as a relapse in oil prices and fresh
drops in Chinese stocks made sentiment even more fragile before a U.S.
Federal Reserve policy statement due later.
European
shares are expected to have a mixed start. Spreadbetters are expecting
Britain's FTSE and France's CAC 40 to to open flat to slightly higher
and Germany's DAX to open broadly unchanged.
Technology giant Apple Inc's forecast of its first revenue drop in 13 years signalled a risk of diminishing corporate profitability and more downgrades.
MSCI's broadest index of Asia-Pacific shares outside Japan was near the day's lows with meagre gains of 0.2 percent. Australian shares dropped 1.2 percent.
With Chinese stocks falling more than 3 percent after a 6.4 percent tumble in the previous session, Asia failed to draw much support from an overnight bounce on Wall Street led by upbeat earnings results and a bounce in crude oil. U.S. stock futures were pointing to a weaker start.
Benchmark indexes fell sharply on Wednesday taking losses over two sessions to nearly 10 percent with both the mainland and the Hong Kong stock markets worst performers globally.
Valuations had taken quite a beating. The benchmark Hong Kong stock market index was trading at a price to earnings multiple of 7.4 times, a post 2008 crisis low while the China enterprises index was being quoted at a multiple of less than 6 times, its cheapest since December 2001.
"The Hang Seng China Enterprises index is currently priced for a credit event which we think is slightly extreme," said Michelle Leung, CEO of Xingtai Capital Management, a hedge fund focused on Chinese consumer stocks.
Technology giant Apple Inc's forecast of its first revenue drop in 13 years signalled a risk of diminishing corporate profitability and more downgrades.
MSCI's broadest index of Asia-Pacific shares outside Japan was near the day's lows with meagre gains of 0.2 percent. Australian shares dropped 1.2 percent.
With Chinese stocks falling more than 3 percent after a 6.4 percent tumble in the previous session, Asia failed to draw much support from an overnight bounce on Wall Street led by upbeat earnings results and a bounce in crude oil. U.S. stock futures were pointing to a weaker start.
Benchmark indexes fell sharply on Wednesday taking losses over two sessions to nearly 10 percent with both the mainland and the Hong Kong stock markets worst performers globally.
Valuations had taken quite a beating. The benchmark Hong Kong stock market index was trading at a price to earnings multiple of 7.4 times, a post 2008 crisis low while the China enterprises index was being quoted at a multiple of less than 6 times, its cheapest since December 2001.
"The Hang Seng China Enterprises index is currently priced for a credit event which we think is slightly extreme," said Michelle Leung, CEO of Xingtai Capital Management, a hedge fund focused on Chinese consumer stocks.
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