Asian markets fall to 2-yr low
Wednesday, 20 August 2008
TOKYO, Aug 19 (RTTNews): The stock markets across the Asia-Pacific region fell to a two-year low Tuesday, as fears that the US government will have to bail out the top mortgage finance companies weighed on financial stocks.
Another report that Lehman Brothers Holdings could post weaker-than-expected third-quarter results also added to the gloom.
Exporters lost ground as the dollar paused after an eleven-day winning streak. Crude oil prices settled lower overnight after the tropical storm Fay steered clear of oil-producing infrastructure in the Gulf of Mexico.
The Japanese market closed sharply lower, reversing Monday's gains. The benchmark Nikkei 225 index closed down 300.40 points or 2.28 per cent at a one-month low of 12,865.05.
The broader Topix index of all the First Section issues on the Tokyo Stock Exchange lost 28.21 points or 2.23 per cent to finish at 1,235.54.
The Bank of Japan's policy board members voted unanimously to leave interest rates steady, but cut their views on Japan's economy, as it became increasingly apparent that the economy has entered a downturn both at home and abroad.
The board agreed to keep the unsecured overnight call loan rate unchanged at 0.50 per cent, the lowest level among Group of Seven nations, marking the 10th consecutive unanimous vote.
In the financial sector, Mitsubishi UFJ Financial Group fell 1.90 per cent after Japan's largest banking group said Monday that it had clinched a deal to take full control of California bank UnionBanCal Corporation after sweetening its bid.
Sumitomo Mitsui Financial Group lost 2.70 per cent, Resona Holdings dropped 2.80 per cent and Mizuho Financial Group shed 2.10 per cent. Nomura Holdings shed 2.60 per cent and Daiwa securities Group declined 2.50 per cent.
Insurance and steel makers also posted sharp losses. Mitsui Sumitomo Insurance Group Holdings plunged 4.0 per cent and Sompo Japan Insurance tumbled 5.20 per cent. Nippon Steel lost 3.20 per cent and JFE Holdings dropped 3.40 per cent.
Among exporters, Canon tumbled 3.80 per cent, Sony shed 2.30 per cent, Toyota Motor gave away 3.0 per cent and Nissan Motor declined 2.40 per cent. In the tech sector, Advantest slumped 4.90 per cent, Kyocera tumbled 3.0 per cent, Fanuc plummeted 2.60 per cent, Matsushita Electrical Industrial lost 1.10 per cent, NEC shed 3.20 per cent and Fujitsu plunged 4.30 per cent.
In the oil space, oil and gas miner Inpex Holdings edged down 0.10 per cent and Nippon Oil declined 0.80 per cent, while Nippon Mining Holdings plummeted 5.0 per cent.
Bucking the trend JGC Corporation surged 3.30 per cent, Mitsui Chemicals advanced 0.50 per cent, Nippon Express climbed 1.70 per cent, Tokyo Gas edged up 0.20 per cent and Yahoo Japan jumped 2.90 per cent.
The South Korean market plunged, extending Monday's losses, as investors locked in profits following renewed US credit concerns and a global economic slowdown. The benchmark Korea Composite Stock Price Index or KOSPI fell 26.3 points or 1.68 per cent to finish at 1,541.41.
Tech bellwether Samsung Electronics fell 2.60 per cent, LG Electronics plunged 3.40 per cent and Hynix Semiconductors plummeted 4.30 per cent. Steelmaker POSCO shed 2.30 per cent, while leading shipyard Hyundai Heavy Industries dropped 3.10 per cent.
Carmaker Hyundai Motor lost 2.10 per cent and Kia Motors tumbled 5.10 per cent. In the financial sector, top brokerage Samsung Securities fell 2.60 per cent, Shinhan Financial Group dropped 1.60 per cent, Woori Finance Holdings plummeted 3.70 per cent and Mirae Asset Securities shed 4.20 per cent.
STX units fell on worries about the group's liquidity after it said Monday that it was more than doubling its stake in No.1 European ship maker Aker Yards to 88.40 per cent through a $635.5 million tender offer. STX Engine plunged 7.60 per cent, STX Corp fell 5.30 per cent and STX Shipbuilding shed 3.70 per cent.
Bucking the trend, Doosan Construction gained 2.30 per cent after the company said Monday that it was dropping its bid interest in Daewoo Shipbuilding. Other gainers included Lotte Shopping 0.50 per cent and tobacco monopoly KT&G 1.44 per cent.
The Chinese market closed higher, rebounding from Monday's 5.34 per cent plunge, led by power producers and banks. Banks got a boost after China Merchants Bank reported better-than-expected first-half earnings, while power firms gained on hopes for further tariff hikes. The benchmark Shanghai Composite Index closed up 24.60 points or 1.06 per cent at 2,344.47.
China Merchants Bank rose 3.20 per cent after the lender said that first-half net profit rose 116.40 per cent on year-over-year basis to 13.245 billion yuan.
The bank also said that it held debt with face value of US$110 million and US$70 million respectively issued by the US mortgage groups Fannie Mae and Freddie Mac at the end of June. It has an unrealised gain of US$1.56 million on these securities.
Among other banks, Industrial Bank jumped 4.20 per cent and Huaxia Bank gained 3.90 per cent.
Power producers were higher amid expectations of another round of power-tariff hikes. Huadian Power International advanced 5.80 per cent and GD Power Development climbed 1.90 per cent.
China South Locomotive & Rolling Stock, the country's largest rail equipment maker, surged 7.30 per cent after rising 58.26 per cent on its debut Monday in Shanghai.
However, coal firms underperformed, with Hebei Jinniu Energy Resources falling 0.80 per cent and China Shenhua Energy losing 1.20 per cent.
In the airline sector, China Southern Airlines advanced 0.80 per cent after the company announced that its first-half net profit surged 368.20 per cent on year-over-year basis to 838 million yuan under Chinese accounting standards.
The airline also downgraded its full-year operating targets due to the slowing global economy. Shanghai Airlines edged up 0.20 per cent after the company booked a net profit of 23.41 million yuan compared to a loss of 134.51 million yuan a year earlier.
China Oilfield Services gained 1.60 per cent after the company said that unit COSL Norwegian AS has received acceptances for about 147.65 million shares of Norwegian oil services firm Awilco Offshore ASA, equivalent to a 98.82 per cent stake, at the expiry of its HK$19.5 billion bid for Awilco on August 15.
The Hong Kong market closed lower, with the benchmark index hitting a new low for the year. Local property developers fell sharply on worries that a weakening economy will dampen housing sales in the coming months. The benchmark Hang Seng index closed down 446.30 points or 2.13 per cent at day's low of 20,484.37.
Sino Land fell 5.30 per cent, extending its 4.90 per cent decline Monday, while tycoon Li Ka-shing's flagship Cheung Kong Holdings lost 4.30 per cent ahead of its first-half results due Thursday.
Financials were weak on US credit worries and commodity stocks were mostly down on fears that the world's major economies might slip into recession.
Handset maker Foxconn International gained 4.80 per cent after plunging 24 per cent Monday following a profit-warning.
The Australian stock market closed sharply lower, with both the financial and resources sectors ending in the red. More than A$25 billion was wiped off the value of the market.
The benchmark S&P/ASX 200 index closed down 118.6 points or 2.40 per cent at 4,866.4, its lowest close since August 5. The broader All Ordinaries index dropped 113.1 points or 2.20 per cent to finish at 4,930.4.
On the economic front, the minutes of the Reserve Bank of Australia's August 5 policy meeting showed that the central bank was poised to consider a drop from the current 12-year high cash rate of 7.50 per cent.
The Reserve Bank of Australia Policy Board thinks that an interest rate reduction might be necessary to help steer the nation's economy away from a deeper economic slowdown. The Board's next meeting is scheduled for September 2.
Meanwhile, the Australian Bureau of Statistics reported that merchandise imports in Australia increased in July to A$19.66 billion from a revised A$17.52 billion in June.
The financial sector posted sharp losses. National Australia Bank and Westpac Banking Group fell 3.0 per cent each, while Commonwealth Bank lost 2.70 per cent and Australia and New Zealand Banking Group plunged 3.70 per cent. Takeover target St George Bank dropped 2.80 per cent and investment bank Macquarie Group plummeted 4.0 per cent.
Among insurers AXA Asia Pacific tumbled 4.20 per cent, QBE Insurance shed 1.90 per cent and AMP slumped 5.20 per cent, but Insurance Australia advanced 0.50 per cent.
Big miners lost ground, on weaker base metals prices, despite strong results from BHP Billiton Monday. Index leader BHP Billiton plunged 4.20 per cent, while rival Rio Tinto shed 3.80 per cent. Gold producer Newcrest Mining added 1.70 per cent, but Lihir Gold fell 1.80 per cent.
Energy stocks closed lower on weaker crude oil prices. Sector leader Woodside Petroleum lost 2.30 per cent, Santos plunged 5.0 per cent and Oil Search gave away 3.10 per cent even though the company said that net profit for the six months to June increased more than five-fold to US$264.4 million.
In the retail sector, David Jones closed little changed, while Wesfarmers shed 1.10 per cent and Woolworths climbed 0.50 per cent.
Construction and material firm Boral shed 1.30 per cent after the company announced that its full-year net profit fell 19 per cent due to weakness in the US housing market. Virgin Blue slumped 27.90 per cent after it posted a 55 per cent drop in net profit for 2007-2008 and warned that conditions would remain challenging.
GWA International tumbled 6.10 per cent after the company reported that its annual profit declined to its lowest in seven years. Babcock & Brown plunged 23.50 per cent on speculation that its chief executive had resigned and on concerns about its funding position and business model.
The New Zealand stock market closed lower for the second straight session. The benchmark NZX 50 index closed down 14.55 points or 0.44 per cent at 3,319.60, off day's low of 3,303.76. The broader NZX All Capital index lost 8.44 points or 0.25 per cent to finish at 3,346.11.
On the economic front, Statistics New Zealand said that Capital Goods Price Index, or CGPI, increased 1.0 per cent in the second quarter from the previous quarter due to jumps in prices for plant, machinery and equipment as well as costs for construction of new houses. On year-over-year basis, the June-quarter CGPI increased 3.10 per cent.
Statistics New Zealand also reported that producer prices increased sharply in the second quarter of 2008. Producer input prices, which exclude farm and factory labour, rose 5.60 per cent from the first quarter, while output prices increased 3.50 per cent.
The increases were the fastest in more than 20 years. On an annualised basis, input prices jumped 11.80 per cent and output prices rose 8.50 per cent.
Among top stocks, Telecom fell 0.90 per cent and Fletcher Building plunged 4.20 per cent, while Contact Energy advanced 0.50 per cent.
The retailers closed mixed. The Warehouse Group and Pumpkin Patch lost 0.60 per cent each, while Hallenstein Glasson gained 0.70 per cent and Michael Hill jumped 2.30 per cent.
Other major gainers included Fisher & Paykel Appliances 1.60 per cent, Fisher & Paykel Healthcare 2.40 per cent, Infratil 1.90 per cent and TrustPower 2.10 per cent. Rural services company PGG Wrightson rose 1.40 per cent after it reported an 80 per cent rise in annual net profit to NZ$73.2 million.
Among other major losers, Telstra fell 2.40 per cent, Pike River Coal lost 1.70 per cent, New Zealand Farming Systems Uruguay plunged 4.70 per cent, Methven dropped 1.80 per cent, Lion Nathan gave away 2.80 per cent, Australia and New Zealand Banking Group plummeted 3.0 per cent and AMP tumbled 5.30 per cent.
Taiwan's Taiex closed down 0.32 per cent at 6,978; Singapore's STI closed down 1.75 per cent at 2,728; Malaysia's KLCI closed down 1.38 per cent at 1,069; Indonesia's Jakarta Composite index closed down 2.05 per cent at 2,042; and India's Sensex closed down 0.70 per cent at 14,543.
Another report that Lehman Brothers Holdings could post weaker-than-expected third-quarter results also added to the gloom.
Exporters lost ground as the dollar paused after an eleven-day winning streak. Crude oil prices settled lower overnight after the tropical storm Fay steered clear of oil-producing infrastructure in the Gulf of Mexico.
The Japanese market closed sharply lower, reversing Monday's gains. The benchmark Nikkei 225 index closed down 300.40 points or 2.28 per cent at a one-month low of 12,865.05.
The broader Topix index of all the First Section issues on the Tokyo Stock Exchange lost 28.21 points or 2.23 per cent to finish at 1,235.54.
The Bank of Japan's policy board members voted unanimously to leave interest rates steady, but cut their views on Japan's economy, as it became increasingly apparent that the economy has entered a downturn both at home and abroad.
The board agreed to keep the unsecured overnight call loan rate unchanged at 0.50 per cent, the lowest level among Group of Seven nations, marking the 10th consecutive unanimous vote.
In the financial sector, Mitsubishi UFJ Financial Group fell 1.90 per cent after Japan's largest banking group said Monday that it had clinched a deal to take full control of California bank UnionBanCal Corporation after sweetening its bid.
Sumitomo Mitsui Financial Group lost 2.70 per cent, Resona Holdings dropped 2.80 per cent and Mizuho Financial Group shed 2.10 per cent. Nomura Holdings shed 2.60 per cent and Daiwa securities Group declined 2.50 per cent.
Insurance and steel makers also posted sharp losses. Mitsui Sumitomo Insurance Group Holdings plunged 4.0 per cent and Sompo Japan Insurance tumbled 5.20 per cent. Nippon Steel lost 3.20 per cent and JFE Holdings dropped 3.40 per cent.
Among exporters, Canon tumbled 3.80 per cent, Sony shed 2.30 per cent, Toyota Motor gave away 3.0 per cent and Nissan Motor declined 2.40 per cent. In the tech sector, Advantest slumped 4.90 per cent, Kyocera tumbled 3.0 per cent, Fanuc plummeted 2.60 per cent, Matsushita Electrical Industrial lost 1.10 per cent, NEC shed 3.20 per cent and Fujitsu plunged 4.30 per cent.
In the oil space, oil and gas miner Inpex Holdings edged down 0.10 per cent and Nippon Oil declined 0.80 per cent, while Nippon Mining Holdings plummeted 5.0 per cent.
Bucking the trend JGC Corporation surged 3.30 per cent, Mitsui Chemicals advanced 0.50 per cent, Nippon Express climbed 1.70 per cent, Tokyo Gas edged up 0.20 per cent and Yahoo Japan jumped 2.90 per cent.
The South Korean market plunged, extending Monday's losses, as investors locked in profits following renewed US credit concerns and a global economic slowdown. The benchmark Korea Composite Stock Price Index or KOSPI fell 26.3 points or 1.68 per cent to finish at 1,541.41.
Tech bellwether Samsung Electronics fell 2.60 per cent, LG Electronics plunged 3.40 per cent and Hynix Semiconductors plummeted 4.30 per cent. Steelmaker POSCO shed 2.30 per cent, while leading shipyard Hyundai Heavy Industries dropped 3.10 per cent.
Carmaker Hyundai Motor lost 2.10 per cent and Kia Motors tumbled 5.10 per cent. In the financial sector, top brokerage Samsung Securities fell 2.60 per cent, Shinhan Financial Group dropped 1.60 per cent, Woori Finance Holdings plummeted 3.70 per cent and Mirae Asset Securities shed 4.20 per cent.
STX units fell on worries about the group's liquidity after it said Monday that it was more than doubling its stake in No.1 European ship maker Aker Yards to 88.40 per cent through a $635.5 million tender offer. STX Engine plunged 7.60 per cent, STX Corp fell 5.30 per cent and STX Shipbuilding shed 3.70 per cent.
Bucking the trend, Doosan Construction gained 2.30 per cent after the company said Monday that it was dropping its bid interest in Daewoo Shipbuilding. Other gainers included Lotte Shopping 0.50 per cent and tobacco monopoly KT&G 1.44 per cent.
The Chinese market closed higher, rebounding from Monday's 5.34 per cent plunge, led by power producers and banks. Banks got a boost after China Merchants Bank reported better-than-expected first-half earnings, while power firms gained on hopes for further tariff hikes. The benchmark Shanghai Composite Index closed up 24.60 points or 1.06 per cent at 2,344.47.
China Merchants Bank rose 3.20 per cent after the lender said that first-half net profit rose 116.40 per cent on year-over-year basis to 13.245 billion yuan.
The bank also said that it held debt with face value of US$110 million and US$70 million respectively issued by the US mortgage groups Fannie Mae and Freddie Mac at the end of June. It has an unrealised gain of US$1.56 million on these securities.
Among other banks, Industrial Bank jumped 4.20 per cent and Huaxia Bank gained 3.90 per cent.
Power producers were higher amid expectations of another round of power-tariff hikes. Huadian Power International advanced 5.80 per cent and GD Power Development climbed 1.90 per cent.
China South Locomotive & Rolling Stock, the country's largest rail equipment maker, surged 7.30 per cent after rising 58.26 per cent on its debut Monday in Shanghai.
However, coal firms underperformed, with Hebei Jinniu Energy Resources falling 0.80 per cent and China Shenhua Energy losing 1.20 per cent.
In the airline sector, China Southern Airlines advanced 0.80 per cent after the company announced that its first-half net profit surged 368.20 per cent on year-over-year basis to 838 million yuan under Chinese accounting standards.
The airline also downgraded its full-year operating targets due to the slowing global economy. Shanghai Airlines edged up 0.20 per cent after the company booked a net profit of 23.41 million yuan compared to a loss of 134.51 million yuan a year earlier.
China Oilfield Services gained 1.60 per cent after the company said that unit COSL Norwegian AS has received acceptances for about 147.65 million shares of Norwegian oil services firm Awilco Offshore ASA, equivalent to a 98.82 per cent stake, at the expiry of its HK$19.5 billion bid for Awilco on August 15.
The Hong Kong market closed lower, with the benchmark index hitting a new low for the year. Local property developers fell sharply on worries that a weakening economy will dampen housing sales in the coming months. The benchmark Hang Seng index closed down 446.30 points or 2.13 per cent at day's low of 20,484.37.
Sino Land fell 5.30 per cent, extending its 4.90 per cent decline Monday, while tycoon Li Ka-shing's flagship Cheung Kong Holdings lost 4.30 per cent ahead of its first-half results due Thursday.
Financials were weak on US credit worries and commodity stocks were mostly down on fears that the world's major economies might slip into recession.
Handset maker Foxconn International gained 4.80 per cent after plunging 24 per cent Monday following a profit-warning.
The Australian stock market closed sharply lower, with both the financial and resources sectors ending in the red. More than A$25 billion was wiped off the value of the market.
The benchmark S&P/ASX 200 index closed down 118.6 points or 2.40 per cent at 4,866.4, its lowest close since August 5. The broader All Ordinaries index dropped 113.1 points or 2.20 per cent to finish at 4,930.4.
On the economic front, the minutes of the Reserve Bank of Australia's August 5 policy meeting showed that the central bank was poised to consider a drop from the current 12-year high cash rate of 7.50 per cent.
The Reserve Bank of Australia Policy Board thinks that an interest rate reduction might be necessary to help steer the nation's economy away from a deeper economic slowdown. The Board's next meeting is scheduled for September 2.
Meanwhile, the Australian Bureau of Statistics reported that merchandise imports in Australia increased in July to A$19.66 billion from a revised A$17.52 billion in June.
The financial sector posted sharp losses. National Australia Bank and Westpac Banking Group fell 3.0 per cent each, while Commonwealth Bank lost 2.70 per cent and Australia and New Zealand Banking Group plunged 3.70 per cent. Takeover target St George Bank dropped 2.80 per cent and investment bank Macquarie Group plummeted 4.0 per cent.
Among insurers AXA Asia Pacific tumbled 4.20 per cent, QBE Insurance shed 1.90 per cent and AMP slumped 5.20 per cent, but Insurance Australia advanced 0.50 per cent.
Big miners lost ground, on weaker base metals prices, despite strong results from BHP Billiton Monday. Index leader BHP Billiton plunged 4.20 per cent, while rival Rio Tinto shed 3.80 per cent. Gold producer Newcrest Mining added 1.70 per cent, but Lihir Gold fell 1.80 per cent.
Energy stocks closed lower on weaker crude oil prices. Sector leader Woodside Petroleum lost 2.30 per cent, Santos plunged 5.0 per cent and Oil Search gave away 3.10 per cent even though the company said that net profit for the six months to June increased more than five-fold to US$264.4 million.
In the retail sector, David Jones closed little changed, while Wesfarmers shed 1.10 per cent and Woolworths climbed 0.50 per cent.
Construction and material firm Boral shed 1.30 per cent after the company announced that its full-year net profit fell 19 per cent due to weakness in the US housing market. Virgin Blue slumped 27.90 per cent after it posted a 55 per cent drop in net profit for 2007-2008 and warned that conditions would remain challenging.
GWA International tumbled 6.10 per cent after the company reported that its annual profit declined to its lowest in seven years. Babcock & Brown plunged 23.50 per cent on speculation that its chief executive had resigned and on concerns about its funding position and business model.
The New Zealand stock market closed lower for the second straight session. The benchmark NZX 50 index closed down 14.55 points or 0.44 per cent at 3,319.60, off day's low of 3,303.76. The broader NZX All Capital index lost 8.44 points or 0.25 per cent to finish at 3,346.11.
On the economic front, Statistics New Zealand said that Capital Goods Price Index, or CGPI, increased 1.0 per cent in the second quarter from the previous quarter due to jumps in prices for plant, machinery and equipment as well as costs for construction of new houses. On year-over-year basis, the June-quarter CGPI increased 3.10 per cent.
Statistics New Zealand also reported that producer prices increased sharply in the second quarter of 2008. Producer input prices, which exclude farm and factory labour, rose 5.60 per cent from the first quarter, while output prices increased 3.50 per cent.
The increases were the fastest in more than 20 years. On an annualised basis, input prices jumped 11.80 per cent and output prices rose 8.50 per cent.
Among top stocks, Telecom fell 0.90 per cent and Fletcher Building plunged 4.20 per cent, while Contact Energy advanced 0.50 per cent.
The retailers closed mixed. The Warehouse Group and Pumpkin Patch lost 0.60 per cent each, while Hallenstein Glasson gained 0.70 per cent and Michael Hill jumped 2.30 per cent.
Other major gainers included Fisher & Paykel Appliances 1.60 per cent, Fisher & Paykel Healthcare 2.40 per cent, Infratil 1.90 per cent and TrustPower 2.10 per cent. Rural services company PGG Wrightson rose 1.40 per cent after it reported an 80 per cent rise in annual net profit to NZ$73.2 million.
Among other major losers, Telstra fell 2.40 per cent, Pike River Coal lost 1.70 per cent, New Zealand Farming Systems Uruguay plunged 4.70 per cent, Methven dropped 1.80 per cent, Lion Nathan gave away 2.80 per cent, Australia and New Zealand Banking Group plummeted 3.0 per cent and AMP tumbled 5.30 per cent.
Taiwan's Taiex closed down 0.32 per cent at 6,978; Singapore's STI closed down 1.75 per cent at 2,728; Malaysia's KLCI closed down 1.38 per cent at 1,069; Indonesia's Jakarta Composite index closed down 2.05 per cent at 2,042; and India's Sensex closed down 0.70 per cent at 14,543.