HONG KONG (Thomson Financial) - (Adds closing levels throughout)
Most stocks across the region fell on Thursday tracking declines on Wall Street
where concerns mounted about soaring crude oil prices and signs of further
deterioration in the U.S. economy.
"Investors are literally panicking as they see no signs of easing in oil
prices and as growth forecasts for the global and domestic economy are being
revised down constantly," said Kwak Joong-bo, an analyst at Hana Daetoo
Securities in Seoul.
Stocks are now pretty cheap but Kwak said there is a widespread perception
share prices will fall further, so investors are not buying yet.
"Earlier this year, not many had expected oil prices to creep up to $150 per
barrel and now that mark is nearly in front of us. So I cannot confidently
recommend buying now under this really bearish mood," he said.
The Kospi index closed down 1.1 percent at 1,606.54.
Japan's Nikkei 225 Stock Average closed down 0.2 percent at 13,265.40 and
the broader Topix shed 0.2 percent to 1,298.02.
In Australia, the S&P/ASX 200 fell 1.9 percent to finish at 4,998.3, a near
two-year low, and the All ordinaries closed down 2.3 percent at 5,094.
The Hang Seng index dipped 0.6 percent to 21,579.20, recouping early losses
after the Shanghai market's rebound inspired investors to seek bargains.
The benchmark Shanghai Composite Index closed up 1.95 percent at 2,703.53,
following recent falls.
Foreign investor selling continued from last week as the appetite for risk
was dulled by record-high oil prices and worries about the U.S. financial sector
Caution ahead of more jobs data from the U.S. tonight and the European
Central Bank rate decision added to the downdraft. The ECB is expected to raise
rates by 25 basis points to 4.25 percent at a policy meeting later on Thursday.
On Wall Street overnight, the Dow fell 1.5 percent to 11,215.51, the lowest
close since August 2006. It now stands 20.82 percent below its Oct. 9, 2007
record of 14,164.53, officially slipping into bear market territory.
Crude oil hit a record $144.32 a barrel in after-hours trading after
reaching a record settlement of $143.57, an advance of $2.60 on the New York
Mercantile Exchange. The Energy Department reported that U.S. crude oil supplies
fell more than expected last week.
General Motors Corp. shares hit a multi-decade low, falling 15 percent to
end below the $10 mark for the first time since September 1954 after a Citi
Investment Research analyst slashed his price target on GM stock to $14 from
$21, citing liquidity concerns.
Although the analyst said the company is not likely to face an immediate
cash shortage, concerns from 2008-09 have grown in recent months.
Automakers fell on the news. In Korea, Hyundai Motor tumbled 4.5 percent to
70,200 won and Kia Motors fell 2.6 percent to 11,400 won. In Japan, Honda Motor
shed 0.3 percent to 3,590 yen.
Airlines continued to tumble on record fuel costs. In Hong Kong, Cathay
Pacific was down 1 percent to HK$13.84 after losing nearly 6 percent on
Wednesday, after it said its results this year will be disappointing due to high
jet fuel prices.
Manila's composite index lost 2.3 percent to end at 2,339.84, Singapore's
Straits Times Index finished down 0.9 percent at 2,880.45 and the Kuala Lumpur
Composite Index (KLCI) finished down 1.8 percent at 1,153.70, off a low of
1,149.09.
The Jakarta composite index closed down 3.9 percent at 2,286.61 and India's
Sensex provisionally ended 4.45 percent lower at 13,056.74.
Meanwhile, Taiwan's weighted index closed up 0.55 percent at 7,394.10.
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