Asian stocks drop, extending global rout
Tuesday, 7 August 2007
SINGAPORE, Aug 6 (Bloomberg): Asian stocks fell, extending a rout that wiped $2.66 trillion from global equities, on concern losses in the US subprime mortgage market will slow economic growth and drive up financing costs.
Macquarie Bank Ltd. and DBS Group Holdings Ltd. led declines by brokerages and banks. Sony Corp. fell after the yen rose to a four-month high as investors pared bets on assets funded with the currency. Treasuries climbed as investors sought the safety of government bonds over equities and corporate debt.
``Market concern has spread to the broader US economy from the subprime issue and investors are re-evaluating their bullish view of exporter stocks,'' said Hiroshi Chano, who helps manage $7.3 billion at Yasuda Asset Management Co. in Tokyo. ``Financial shares were also sold on speculation they will be affected.''
The Morgan Stanley Capital International Asia Pacific Index lost 1 per cent to 151.32 at 6:21 p.m. in Tokyo. The benchmark has dropped 6.2 per cent since closing at a record on July 24. The drop has wiped out more than the combined market value of South Korea and Australia since this year's peak on July 23.
Delinquencies on loans made to people with poor credit and a resultant sell-off in high-yield debt have caused losses among money managers worldwide. Shares in developing nations such as Indonesia posted the region's biggest declines today.
Macquarie Bank Ltd. and DBS Group Holdings Ltd. led declines by brokerages and banks. Sony Corp. fell after the yen rose to a four-month high as investors pared bets on assets funded with the currency. Treasuries climbed as investors sought the safety of government bonds over equities and corporate debt.
``Market concern has spread to the broader US economy from the subprime issue and investors are re-evaluating their bullish view of exporter stocks,'' said Hiroshi Chano, who helps manage $7.3 billion at Yasuda Asset Management Co. in Tokyo. ``Financial shares were also sold on speculation they will be affected.''
The Morgan Stanley Capital International Asia Pacific Index lost 1 per cent to 151.32 at 6:21 p.m. in Tokyo. The benchmark has dropped 6.2 per cent since closing at a record on July 24. The drop has wiped out more than the combined market value of South Korea and Australia since this year's peak on July 23.
Delinquencies on loans made to people with poor credit and a resultant sell-off in high-yield debt have caused losses among money managers worldwide. Shares in developing nations such as Indonesia posted the region's biggest declines today.