HONG KONG (Thomson Financial) - (Adding closing levels throughout)
Asian markets tumbled Friday after yet another record high for oil prices and a
slew of negative financial news sent Wall Street into a tailspin.
Concerns about the slowing economy, accelerating inflation and stress in the
credit markets continued to depress sentiment.
"Rising oil prices and inflation fears are beating up stock markets around
the world," said Hong In-young, an analyst at Hyundai Motor IB Securities Co.
Ltd. in Seoul.
Hong said investors have lost their appetite for stocks amid growing worries
that major economies, are at risk of suffering stagflation -- the condition of
slowing growth and rising prices.
"It is a bit of a bloodbath after Wall Street. We're seeing a lot of red
right across the whole board," said Juliette Saly, an equities analyst at
CommSec in Sydney.
Overnight, the Dow dropped 358.41 points, more than 3 percent, to close at
11,453.42 -- its lowest finish since Sept. 11, 2006.
Oil futures shot past $140 for the first time after the head of OPEC
predicted the price of a barrel of crude could rise well over $150 this year and
Libya said it may cut oil production
In the region, the Taiwan market was among the hardest hit. Taiwan's
weighted index declined 3.4 percent to 7,548.76 after a jump in oil prices and
local monetary tightening moves.
Besides an interest rate hike of 12.50 basis points, the Taiwan central bank
announced Thursday hikes in reserve ratios on bank deposits, its first such
tightening measure in two decades. The measures were part of efforts to fight
inflation.
In Shanghai, the benchmark index tumbled 5.3 percent to 2,748.83, led by
airlines and oil refiners. Hong Kong's Hang Seng index was 1.8 percent lower at
22,042.35.
The Nikkei 225 index lost 2 percent to 13,544.36, and the Topix index was
down 1.8 percent at 1,320.68.
In Seoul, the Kospi was down 1.9 percent at 1,684.45.
The Australian benchmarks closed off their lows as bargain hunters stepped
in. The S&P/ASX 200 was down 1.3 percent at 5,237 and the All Ordinaries down
1.3 percent at 5,349.4.
"The market picked up from its early lows on expectations that Wall Street
will trade higher tonight. I think there was general realisation that the
reaction overnight to warnings on General Motors and Citigroup was a little too
severe," said Michael Heffernan, a private client advisor at Reynolds & Co.
Overnight, the market worried about fresh signs of trouble in the financial,
high-tech and automotive industries. Negative analyst comments sent shares of
General Motors Corp. to their lowest point in more than three decades
Citigroup Inc. stock fell sharply after an analyst gave it a "sell" rating
and warned investors to expect less from the brokerage sector in an uneasy
economy.
Disappointing forecasts from technology bellwethers Oracle Corp. and
BlackBerry maker Research In Motion Ltd. further soured investor mood and made
the tech sector one of the steepest decliners.
Financial and export-oriented stocks were hardest hit in the region.
Commonwealth Bank was down 1.0 percent at A$40.50, National Australia Bank
off 4.9 percent at A$26.70 and ANZ lost 0.3 percent to A$18.95. Westpac fell 3.3
percent to A$20.69 and its takeover target St. George fell 1.4 percent to
A$28.50.
Exporters headed south in Tokyo on a firmer yen. Sony lost 4.4 percent to
4,840 yen, Toyota Motor fell 1.9 percent to 5,070 yen, Honda Motor shed 2.7
percent to 3,650 yen, construction machinery maker Komatsu was down 3.2 percent
at 3,010 yen, and video game console maker Nintendo shed 3 percent to 61,000
yen.
The construction sector slumped in Taiwan as higher borrowing costs are seen
reducing demand for property.
Kuo Yang Construction declined NT$1.60 to 21.90 and Kindom Construction fell
NT$1.15 to 15.75. Both were limit-down 7 percent.
Elsewhere in the region, Singapore's Straits Times index ended down 0.8
percent at 2,955.91, the Philippine Composite was down 2.2 percent at 2,466.28,
the Jakarta index was down 0.8 percent at 2,332.12 and Malaysia's KLCI was down
1.1 percent at 1,190.54.
India's Sensex provisionally ended 4.58 percent lower at 13,760.78.
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