Asian shares lower following Japanese leader’s decision to quit, tumble on Wall Street

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Asian shares lower on cues from Japan, US

BANGKOK — Asian stocks were mostly lower Wednesday after a fall on Wall Street connected to the massive oil spill in the Gulf of Mexico and amid news that Japanese Prime Minister Yukio Hatoyama will resign.

It was the second day of losses for the region’s markets, with benchmark indexes in Japan, Shanghai and Hong Kong down. South Korea’s market was closed for nationwide local elections. A few smaller markets like Thailand and the Philippines were higher, bucking the regional trend.

Oil fell to nearly $72 per barrel, while the dollar gained against the yen but retreated versus the euro.

Asia followed negative cues from Wall Street, where stocks took a dive late in the session after the U.S. government said it was starting criminal and civil investigations into the Gulf oil spill, raising the possibility that oil companies might have to pay out huge fines, or see their operations hampered.

China’s Shanghai benchmark dropped 1.1 percent to 2,538.83 while Hong Kong’s Hang Seng dipped 0.5 percent to 19,409.88.

Japan’s Nikkei 225 stock average lost 109.65 points, or 1.1 percent, to 9,602.18 and Australia’s S&P/ASX 200 shed 0.6 percent to 4,387.80.

The Japanese prime minister had faced growing pressure from within his Democratic Party of Japan to resign ahead of July’s upper house elections after his approval ratings plummeted over his broken campaign promise to move a U.S. Marine base off the southern island of Okinawa.

Hatoyama is the fourth Japanese prime minister to resign in four years.

Jackson Wong, vice president of Tanrich Securities in Hong Kong, said he believed negative factors pulling Asia down included the continuing eurozone crisis and negative cues from Wall Street — not the political news out of Japan.

“The resignation of the prime minister of Japan was actually pretty positive news initially,” Wong said. “When they change the prime minister, the new one will probably have a fresh look toward the economy, so that’s pretty good news.”

But he said the euro crisis is “still evolving. We are still not out of the woods.”

On Tuesday, the Dow fell 112.61, or 1.1 percent, to 10,024.02. The Standard & Poor’s 500 index fell 18.70, or 1.7 percent, to 1,070.71, while the Nasdaq composite index fell 34.71, or 1.5 percent, to 2,222.33.

In currencies, the dollar gained to 91.41 yen from 90.98 yen late Tuesday in New York. The euro rose to $1.2212 from $1.2204.

Benchmark crude for July delivery was down 30 cents at $72.27 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.39 to settle at $72.58 on Tuesday.