Asian Stocks Down for 3rd Day, Yellen Testimony Awaited

Asian stock markets fell for a third consecutive day Wednesday, beset by nerves about shaky global growth, falling oil prices and possible capital shortfalls at major European banks.

Japan’s Nikkei 225 sank 2.3 percent to 15,713.39 and is down about 11 percent in the past month. Australia’s S&P/ASX 200 shed 1.2 percent to 4,775.70. Stock benchmarks also fell in Southeast Asia, India and New Zealand. Markets are closed in China, Taiwan, Hong Kong and South Korea for a bank holiday. Hong Kong and Korea reopen on Thursday and China and Taiwan resume trading on Monday.

Banks also face economic headwinds that could slow lending and hurt profits. Some are also affected by the slump in oil prices via their loans to energy companies. The nerves in Europe have spread to banks worldwide. In Asia, Mizuho Financial was down 3.5 percent in Tokyo and ANZ fell 1.9 percent in Sydney.

“The central bank life support trade of the past eight years has now created this coma-like scenario where markets cannot return to normal trading,” said Evan Lucas, market strategist at IG in Melbourne, Australia. “The artificial support from central banks is at a crossroads. Central bank intervention will no longer create the holding pattern of the past year. Markets now believe banks are out of ammunition,” he said in a market commentary.

Federal Reserve Chair Janet Yellen begins two days of congressional testimony Wednesday that is keenly awaited by markets. Since the Fed decided to raise its key interest rate from a record low in December, the U.S. economy has hit some turbulence. Lawmakers will likely have a lot of questions for Yellen about the future pace of rate hikes and the Fed’s role in supporting the U.S. economy.

U.S. stocks extended a losing streak Tuesday, closing slightly lower after spending most of the day wavering between gains and losses. The Dow Jones industrial average fell 12.67 points, or 0.1 percent, to 16,014.38. The Standard & Poor’s 500 slipped 1.23 points, or 0.1 percent, to 1,852.21. The Nasdaq composite lost 14.99 points, or 0.4 percent, to 4,268.76. The latest losses pulled the three indexes further down for the year. The Dow is off 8.1 percent, the S&P 500 is down 9.4 percent and the Nasdaq is off 14.8 percent.

Brent crude, a benchmark for international oils, was up 49 cents at $30.80 a barrel in London. It fell $2.56, or 7.8 percent, to close at $30.32 the day before. It was about $60 a barrel a year ago and $109 two years ago. Benchmark U.S. crude was up 59 cents at $28.53 a barrel in electronic trading on the New York Mercantile Exchange. The futures contract dropped $1.75, or 5.6 percent, to close at $27.94 a barrel on Tuesday.

The euro rose to $1.1294 from $1.1289 the day before. The dollar fell to 114.58 yen from 114.95 yen.