Asian stocks fall for 6th week on growing concern
Monday, 11 February 2008
Asian stocks fell for a sixth week, extending their longest losing streak in more than three years, after a surprise contraction in US service industries fuelled concern that the world's largest economy is in a recession, according to a Bloomberg report released on Internet.
Komatsu Ltd, which counts the Americas as its biggest market, slumped the most since August. JFE Holdings Inc, the world's third-largest steelmaker, led declines among materials stocks with its steepest weekly drop since 2002. Zinifex Ltd fell the most since 2006 after the price of zinc dropped and Morgan Stanley cut its rating.
"The outlook for earnings in Asia will remain suspect until the extent of a US slowdown is determined," said Patrick Manaloto, who helps oversee $5.5 billion of assets at BPI Asset Management Inc in Manila. "Some believe that the contraction in US services is a clear sign of recession."
The MSCI Asia Pacific Index dropped 3.0 per cent this week, widening this year's loss to 11 per cent, the worst start to a year in the gauge's two-decade history. Seven of the region's main markets, including China, Hong Kong, Singapore and South Korea, were closed at least two days for Lunar New Year holidays.
The index had its steepest one-day drop in three weeks on February 6 after an Institute for Supply Management report showed US service industries shrank at the fastest pace since 2001.
Komatsu, the world's second-largest maker of construction machinery, slumped 12 per cent this week to 2,275 yen in Tokyo, and Nintendo Co, which also counts the Americas as its No. 1 market, sank 11 per cent to 47,350 yen. Li & Fung Ltd, a supplier to Wal-Mart Stores Inc, fell 10 per cent to HK$27 in Hong Kong.
Yamaha Motor Co, the world's second-largest maker of motorcycles, had its sharpest one-week loss since at least 1984 after forecasting its first drop in operating profit in eight years on a stronger yen and falling US demand. The stock dropped 18 per cent to 2,030 yen.
Australia's S&P/ASX 200 Index tumbled 3.2 per cent this week, the biggest slump in the region, while Japan's Nikkei 225 Stock Average slipped 3.6 per cent to 13,017.24. South Korea, Malaysia and China were the main Asian markets that rose.
All of the world's major stock benchmarks have dropped this year as losses related to US subprime-mortgage defaults and slowing export growth in Japan fuelled concern the world's two biggest economies are headed into recessions.
Declines have wiped out more than 10 per cent of the world's stock-market capitalisation, or about $6.0 trillion, according to data compiled by Bloomberg. Hong Kong has led the retreat among Asian markets, with the Hang Seng Index falling 16 per cent.
Komatsu Ltd, which counts the Americas as its biggest market, slumped the most since August. JFE Holdings Inc, the world's third-largest steelmaker, led declines among materials stocks with its steepest weekly drop since 2002. Zinifex Ltd fell the most since 2006 after the price of zinc dropped and Morgan Stanley cut its rating.
"The outlook for earnings in Asia will remain suspect until the extent of a US slowdown is determined," said Patrick Manaloto, who helps oversee $5.5 billion of assets at BPI Asset Management Inc in Manila. "Some believe that the contraction in US services is a clear sign of recession."
The MSCI Asia Pacific Index dropped 3.0 per cent this week, widening this year's loss to 11 per cent, the worst start to a year in the gauge's two-decade history. Seven of the region's main markets, including China, Hong Kong, Singapore and South Korea, were closed at least two days for Lunar New Year holidays.
The index had its steepest one-day drop in three weeks on February 6 after an Institute for Supply Management report showed US service industries shrank at the fastest pace since 2001.
Komatsu, the world's second-largest maker of construction machinery, slumped 12 per cent this week to 2,275 yen in Tokyo, and Nintendo Co, which also counts the Americas as its No. 1 market, sank 11 per cent to 47,350 yen. Li & Fung Ltd, a supplier to Wal-Mart Stores Inc, fell 10 per cent to HK$27 in Hong Kong.
Yamaha Motor Co, the world's second-largest maker of motorcycles, had its sharpest one-week loss since at least 1984 after forecasting its first drop in operating profit in eight years on a stronger yen and falling US demand. The stock dropped 18 per cent to 2,030 yen.
Australia's S&P/ASX 200 Index tumbled 3.2 per cent this week, the biggest slump in the region, while Japan's Nikkei 225 Stock Average slipped 3.6 per cent to 13,017.24. South Korea, Malaysia and China were the main Asian markets that rose.
All of the world's major stock benchmarks have dropped this year as losses related to US subprime-mortgage defaults and slowing export growth in Japan fuelled concern the world's two biggest economies are headed into recessions.
Declines have wiped out more than 10 per cent of the world's stock-market capitalisation, or about $6.0 trillion, according to data compiled by Bloomberg. Hong Kong has led the retreat among Asian markets, with the Hang Seng Index falling 16 per cent.