Asian stocks fall to two-week low
Thursday, 14 June 2007
Asian stocks fell to a two-week low on concern interest rates will rise and sap growth in the world's largest economies, reports Bloomberg.
Samsung Electronics Company and Taiwan Semiconductor Manufacturing Co. led declines among exporters after yields on US bonds climbed to the highest in five years. BHP Billiton Ltd led mining shares lower after metals prices dropped.
"A short-term correction looks inevitable for global markets," said Chang In Whan, president of KTB Asset Management Company in Seoul, which has $3.8 billion in equity assets. Global inflationary pressure will "squeeze liquidity," he said.
The Morgan Stanley Capital International Asia-Pacific Index slid 0.9 per cent to 149.38 as of 8:02 p.m. in Tokyo, set for the lowest close since May 30. Japan's Nikkei 225 Stock Average dropped 0.2 per cent, while the Topix index lost 0.3 per cent.
Canon Inc. advanced after the yen weakened against the dollar and euro. China Merchants Bank Co. paced gains in China, where the CSI 300 Index approached a record high. Markets in Sri Lanka and Pakistan had the only other benchmarks that rose.
Samsung, South Korea's largest exporter, slid 0.9 per cent to 573,000 won. The company accounted for about 16 per cent of South Korean exports last year. Taiwan Semiconductor, the world's biggest supplier of made-to-order chips, fell 1.1 per cent to NT$64.10. It makes about three-quarters of its sales in the US
"Everybody has started to think interest rates will continue to rise," said Hideo Arimura, who helps look after $16 billion at Dai-Ichi Kangyo Asset Management Co. in Tokyo. "Some people are also worried about the possibility that US consumption will be curbed."
HSBC Holdings Plc, a London-based lender that controls two of Hong Kong's biggest banks, dropped 0.3 per cent to HK$143. Movements in Hong Kong's interest rates typically track the US because the local currency is linked to the US dollar.
"Most sectors are taking a hit, and you certainly wouldn't want to be holding on to lots of banks, interest-rate sensitive stocks, or anything that is highly leveraged to the economic cycle," said Troy Angus, who helps manage the equivalent of $2.1 billion at Paradice Investment Management Ltd in Sydney.
BHP Billiton, the world's largest mining company, slid 1.7 per cent to A$32.79. Sumitomo Metal Mining Co., Japan's No. 2 copper smelter and biggest nickel producer, plunged 4.2 per cent to 2,620 yen.
A measure of six metals traded on the London Metal Exchange dropped 2.4 per cent yesterday. Copper slipped 2.5 per cent, zinc fell 1.1 per cent and nickel slumped 5.8 per cent.
Japanese exporters gained. Canon, the world's biggest digital-camera maker, added 0.6 per cent to 7,190 yen. Sony Corp, the No 1 maker of game consoles, rose 1.2 per cent to 6,660 yen. Honda Motor Co., Japan's No. 2 automaker by sales, gained 0.5 per cent to 4,240 yen.
The yen dropped to 122.28 against the dollar from 121.69 late in New York yesterday. It reached 122.30 earlier, the lowest since December 2002. The yen fell to 162.45 per euro from a one-month high of 161.51.
A weaker yen increases value of exports sold in dollars when converted to the local currency.
"There's no chance of the yen starting on a sudden strengthening trend," said Akihide Kinugawa, who helps look after the equivalent of $19 billion in Japanese stocks at T&D Asset Management Co. in Tokyo. "Carmakers and other exporters are going to continue to benefit from the yen's weakness."
China's CSI 300 Index rose 2 per cent to 4118.27, its seventh day of gains, approaching a record close of 4168.29 set May 29. Investors set up 242,125 securities accounts for investing in mainland shares and mutual funds on June 11, bringing the tally to 103.6 million, according to the latest future from the China Securities Depository & Clearing Corp. More than a million accounts were opened last week.
China Merchants, the nation's seventh-largest lender, gained 4.7 per cent to 22.64 yuan. China Vanke Co., the biggest listed property developer, rose 5.5 per cent to 19.55 yuan.
Samsung Electronics Company and Taiwan Semiconductor Manufacturing Co. led declines among exporters after yields on US bonds climbed to the highest in five years. BHP Billiton Ltd led mining shares lower after metals prices dropped.
"A short-term correction looks inevitable for global markets," said Chang In Whan, president of KTB Asset Management Company in Seoul, which has $3.8 billion in equity assets. Global inflationary pressure will "squeeze liquidity," he said.
The Morgan Stanley Capital International Asia-Pacific Index slid 0.9 per cent to 149.38 as of 8:02 p.m. in Tokyo, set for the lowest close since May 30. Japan's Nikkei 225 Stock Average dropped 0.2 per cent, while the Topix index lost 0.3 per cent.
Canon Inc. advanced after the yen weakened against the dollar and euro. China Merchants Bank Co. paced gains in China, where the CSI 300 Index approached a record high. Markets in Sri Lanka and Pakistan had the only other benchmarks that rose.
Samsung, South Korea's largest exporter, slid 0.9 per cent to 573,000 won. The company accounted for about 16 per cent of South Korean exports last year. Taiwan Semiconductor, the world's biggest supplier of made-to-order chips, fell 1.1 per cent to NT$64.10. It makes about three-quarters of its sales in the US
"Everybody has started to think interest rates will continue to rise," said Hideo Arimura, who helps look after $16 billion at Dai-Ichi Kangyo Asset Management Co. in Tokyo. "Some people are also worried about the possibility that US consumption will be curbed."
HSBC Holdings Plc, a London-based lender that controls two of Hong Kong's biggest banks, dropped 0.3 per cent to HK$143. Movements in Hong Kong's interest rates typically track the US because the local currency is linked to the US dollar.
"Most sectors are taking a hit, and you certainly wouldn't want to be holding on to lots of banks, interest-rate sensitive stocks, or anything that is highly leveraged to the economic cycle," said Troy Angus, who helps manage the equivalent of $2.1 billion at Paradice Investment Management Ltd in Sydney.
BHP Billiton, the world's largest mining company, slid 1.7 per cent to A$32.79. Sumitomo Metal Mining Co., Japan's No. 2 copper smelter and biggest nickel producer, plunged 4.2 per cent to 2,620 yen.
A measure of six metals traded on the London Metal Exchange dropped 2.4 per cent yesterday. Copper slipped 2.5 per cent, zinc fell 1.1 per cent and nickel slumped 5.8 per cent.
Japanese exporters gained. Canon, the world's biggest digital-camera maker, added 0.6 per cent to 7,190 yen. Sony Corp, the No 1 maker of game consoles, rose 1.2 per cent to 6,660 yen. Honda Motor Co., Japan's No. 2 automaker by sales, gained 0.5 per cent to 4,240 yen.
The yen dropped to 122.28 against the dollar from 121.69 late in New York yesterday. It reached 122.30 earlier, the lowest since December 2002. The yen fell to 162.45 per euro from a one-month high of 161.51.
A weaker yen increases value of exports sold in dollars when converted to the local currency.
"There's no chance of the yen starting on a sudden strengthening trend," said Akihide Kinugawa, who helps look after the equivalent of $19 billion in Japanese stocks at T&D Asset Management Co. in Tokyo. "Carmakers and other exporters are going to continue to benefit from the yen's weakness."
China's CSI 300 Index rose 2 per cent to 4118.27, its seventh day of gains, approaching a record close of 4168.29 set May 29. Investors set up 242,125 securities accounts for investing in mainland shares and mutual funds on June 11, bringing the tally to 103.6 million, according to the latest future from the China Securities Depository & Clearing Corp. More than a million accounts were opened last week.
China Merchants, the nation's seventh-largest lender, gained 4.7 per cent to 22.64 yuan. China Vanke Co., the biggest listed property developer, rose 5.5 per cent to 19.55 yuan.