Asian stocks fall as airlines plunge, commodity shares decline
Thursday, 31 December 2009
TOKYO, Dec 30 (Bloomberg): Asian stocks fell for the first time in three days as Japan Airlines Corp. and Asiana Airlines Inc. plunged on debt concerns and as lower oil and gold prices dragged down commodity producers.
Japan Airlines, or JAL, tumbled to a record low in Tokyo on speculation it will file for bankruptcy. Asiana lost 6.9 per cent in Seoul after the carrier's parent said it may restructure debt at affiliates. PetroChina Co, China's No. 1 oil producer, lost 1.1 per cent in Hong Kong, and Newcrest Mining Ltd, Australia's largest gold producer, sank 0.9 per cent in Sydney. BHP Billiton Ltd., the world's biggest mining company, dropped 0.5 per cent.
"Concern about JAL's legal liquidation is weighing on stocks," said Yoshihiro Ito, senior strategist at Tokyo-based Okasan Asset Management Co., which oversees about $8.2 billion.
The MSCI Asia Pacific Index fell 0.5 per cent to 120.11 as of 5:15 p.m in Tokyo, with twice as many stocks declining as advancing. Nine of the index's 10 industry groups slumped.
The gauge is headed for a 34 per cent gain this year, its biggest annual increase since 2003, as central banks worldwide reduced borrowing costs and governments boosted spending to shore up their economies. The index has fallen about 5 per cent this decade.Japan's Nikkei 225 Stock Average dropped 0.9 per cent to close at 10,546.44 on its last day of trading this year, Wednesday's biggest drop among Asia-Pacific benchmarks. The measure has plunged 73 per cent since it rose to an intraday record of 38,957.44 on the final business day of 1989, making it the world's worst-performing equity index in the period.
Hong Kong's Hang Seng Index was little changed Wednesday. The Shanghai Composite Index in China added 1.6 per cent.
Futures on Standard & Poor's 500 Index fell 0.2 per cent. The index decreased for the first time in seven days yesterday in New York, slipping 0.1 per cent. Declines in energy, financial and technology companies snuffed out an early gain triggered by reports showing home prices rose in October and consumer confidence increased.
Japan Airlines, Asia's biggest carrier by sales, tumbled 24 per cent to 67 yen, its lowest close since the shares began trading in October 2002. It was the MSCI index's steepest decline both Wednesday and this year.
"Shareholders are becoming convinced that bankruptcy will be the case," said Mitsushige Akino, who manages the equivalent of $450 million at Tokyo-based Ichiyoshi Investment Management Co. "They are dumping the stock. JAL's value will be zero if it goes bankrupt."
Asiana Airlines lost 6.9 per cent to 3,645 won, its biggest drop since Feb. 17. Kumho Asiana Group units fell after the parent said it may ask creditors to restructure their debt to ease cash shortages caused by a delay in the sale of Daewoo Engineering & Construction Co. Kumho Industrial Co., the top shareholder in Daewoo Engineering, sank 15 per cent.
The MSCI Asia Pacific Index's gain this year compares with increases of 25 per cent for the S&P 500 and 28 per cent for the Dow Jones Stoxx 600 Index in Europe. Stocks in the MSCI index trade at an average of 23 times estimated earnings, compared with 18 times for the S&P 500 and 16 for the Stoxx.
PetroChina fell 1.1 per cent to HK$9.24, its largest decline since December 22. BHP Billiton, also Australia's top oil producer, lost 0.5 per cent in Sydney and was the biggest drag on the MSCI index. Inpex Corp., Japan's largest oil explorer, fell 2.1 per cent to 701,000 yen in Tokyo.
Japan Airlines, or JAL, tumbled to a record low in Tokyo on speculation it will file for bankruptcy. Asiana lost 6.9 per cent in Seoul after the carrier's parent said it may restructure debt at affiliates. PetroChina Co, China's No. 1 oil producer, lost 1.1 per cent in Hong Kong, and Newcrest Mining Ltd, Australia's largest gold producer, sank 0.9 per cent in Sydney. BHP Billiton Ltd., the world's biggest mining company, dropped 0.5 per cent.
"Concern about JAL's legal liquidation is weighing on stocks," said Yoshihiro Ito, senior strategist at Tokyo-based Okasan Asset Management Co., which oversees about $8.2 billion.
The MSCI Asia Pacific Index fell 0.5 per cent to 120.11 as of 5:15 p.m in Tokyo, with twice as many stocks declining as advancing. Nine of the index's 10 industry groups slumped.
The gauge is headed for a 34 per cent gain this year, its biggest annual increase since 2003, as central banks worldwide reduced borrowing costs and governments boosted spending to shore up their economies. The index has fallen about 5 per cent this decade.Japan's Nikkei 225 Stock Average dropped 0.9 per cent to close at 10,546.44 on its last day of trading this year, Wednesday's biggest drop among Asia-Pacific benchmarks. The measure has plunged 73 per cent since it rose to an intraday record of 38,957.44 on the final business day of 1989, making it the world's worst-performing equity index in the period.
Hong Kong's Hang Seng Index was little changed Wednesday. The Shanghai Composite Index in China added 1.6 per cent.
Futures on Standard & Poor's 500 Index fell 0.2 per cent. The index decreased for the first time in seven days yesterday in New York, slipping 0.1 per cent. Declines in energy, financial and technology companies snuffed out an early gain triggered by reports showing home prices rose in October and consumer confidence increased.
Japan Airlines, Asia's biggest carrier by sales, tumbled 24 per cent to 67 yen, its lowest close since the shares began trading in October 2002. It was the MSCI index's steepest decline both Wednesday and this year.
"Shareholders are becoming convinced that bankruptcy will be the case," said Mitsushige Akino, who manages the equivalent of $450 million at Tokyo-based Ichiyoshi Investment Management Co. "They are dumping the stock. JAL's value will be zero if it goes bankrupt."
Asiana Airlines lost 6.9 per cent to 3,645 won, its biggest drop since Feb. 17. Kumho Asiana Group units fell after the parent said it may ask creditors to restructure their debt to ease cash shortages caused by a delay in the sale of Daewoo Engineering & Construction Co. Kumho Industrial Co., the top shareholder in Daewoo Engineering, sank 15 per cent.
The MSCI Asia Pacific Index's gain this year compares with increases of 25 per cent for the S&P 500 and 28 per cent for the Dow Jones Stoxx 600 Index in Europe. Stocks in the MSCI index trade at an average of 23 times estimated earnings, compared with 18 times for the S&P 500 and 16 for the Stoxx.
PetroChina fell 1.1 per cent to HK$9.24, its largest decline since December 22. BHP Billiton, also Australia's top oil producer, lost 0.5 per cent in Sydney and was the biggest drag on the MSCI index. Inpex Corp., Japan's largest oil explorer, fell 2.1 per cent to 701,000 yen in Tokyo.