Asian stocks drop to lowest since last July
Wednesday, 26 May 2010
TOKYO, May 25 (Bloomberg): Asian stocks fell, dragging the MSCI Asia Pacific Index to its lowest level in 10 months, after a report said North Korea's military had been ordered to prepare for combat and concerns grew Europe's debt crisis may spread.
Samsung Electronics Co, Asia's biggest maker of chips, televisions and mobile phones, declined 2.2 per cent in Seoul. Commonwealth Bank of Australia fell 3.7 per cent, leading declines among financial companies as the International Monetary Fund called on Spain to make more progress overhauling its ailing banks and Asian bond risk rose. Mining company BHP Billiton Ltd dropped 4 per cent after copper and oil retreated.
The MSCI Asia Pacific Index declined 3.2 per cent to 108.70 as of 6:12 pm in Tokyo, the lowest level since July 24. The gauge has tumbled 16 per cent from its high this year on April 15 amid concern widening budget deficits in some European countries and China's steps to curb asset bubbles will derail growth. Standard & Poor's 500 Index futures fell 2.6 per cent.
"This confrontation in Korea is unlikely to result in a full-scale conflict but there is a feeling of discomfort among investors," said Hiroshi Morikawa, a senior strategist at MU Investments Co, which manages $14 billion in Tokyo. "I've been most afraid that the Greece-originated financial problems would spill over to Spain. That seems to be looming now."
North Korean leader Kim Jong Il ordered the military to get ready for combat in a broadcast last week, a defector group reported on its website. Concern deepened that Europe's finances may worsen after four Spanish savings banks submitted a proposal to the nation's central bank to merge their businesses.
Hong Kong's Hang Seng Index sank 3.5 per cent and China's Shanghai Composite Index declined 1.9 per cent. The Nikkei 225 Stock Average lost 3.1 per cent in Tokyo. Australia's S&P/ASX 200 Index tumbled 3 per cent.
South Korea's Kospi fell 2.8 per cent, the most since February 5. Samsung Electronics dropped 2.2 per cent to 741,000 won, while Hyundai Motor Co, South Korea's largest automaker, slipped 2.2 per cent to 135,500 won.
While Kim doesn't want war, North Korea is ready to counter any attacks from South Korea, said O Kuk Ryol, vice chairman of the North's National Defense Commission, the North Korea Intellectuals Solidarity group's website said. The organisation is run by defectors from communist North Korea.
South Korean President Lee Myung Bak said yesterday the country will push for a United Nations censure against North Korea for the March 26 sinking of a naval ship.
Samsung Electronics Co, Asia's biggest maker of chips, televisions and mobile phones, declined 2.2 per cent in Seoul. Commonwealth Bank of Australia fell 3.7 per cent, leading declines among financial companies as the International Monetary Fund called on Spain to make more progress overhauling its ailing banks and Asian bond risk rose. Mining company BHP Billiton Ltd dropped 4 per cent after copper and oil retreated.
The MSCI Asia Pacific Index declined 3.2 per cent to 108.70 as of 6:12 pm in Tokyo, the lowest level since July 24. The gauge has tumbled 16 per cent from its high this year on April 15 amid concern widening budget deficits in some European countries and China's steps to curb asset bubbles will derail growth. Standard & Poor's 500 Index futures fell 2.6 per cent.
"This confrontation in Korea is unlikely to result in a full-scale conflict but there is a feeling of discomfort among investors," said Hiroshi Morikawa, a senior strategist at MU Investments Co, which manages $14 billion in Tokyo. "I've been most afraid that the Greece-originated financial problems would spill over to Spain. That seems to be looming now."
North Korean leader Kim Jong Il ordered the military to get ready for combat in a broadcast last week, a defector group reported on its website. Concern deepened that Europe's finances may worsen after four Spanish savings banks submitted a proposal to the nation's central bank to merge their businesses.
Hong Kong's Hang Seng Index sank 3.5 per cent and China's Shanghai Composite Index declined 1.9 per cent. The Nikkei 225 Stock Average lost 3.1 per cent in Tokyo. Australia's S&P/ASX 200 Index tumbled 3 per cent.
South Korea's Kospi fell 2.8 per cent, the most since February 5. Samsung Electronics dropped 2.2 per cent to 741,000 won, while Hyundai Motor Co, South Korea's largest automaker, slipped 2.2 per cent to 135,500 won.
While Kim doesn't want war, North Korea is ready to counter any attacks from South Korea, said O Kuk Ryol, vice chairman of the North's National Defense Commission, the North Korea Intellectuals Solidarity group's website said. The organisation is run by defectors from communist North Korea.
South Korean President Lee Myung Bak said yesterday the country will push for a United Nations censure against North Korea for the March 26 sinking of a naval ship.