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Asian stocks tumble amid renewed worries

Asian stocks tumble amid renewed worries
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First Published: Thu, Jan 08 2009. 10 19 PM IST
Updated: Thu, Jan 08 2009. 10 19 PM IST
Hong Kong: Asian stock markets fell sharply on Thursday, with benchmarks in Tokyo and Hong Kong tumbling about 4%, as more evidence of company woes and a weak US job market rekindled worries about the unfolding global slump. European markets opened lower.
Every major market in Asia suffered declines, marking an end to a New Year’s rally that had been spurred by speculation that massive government spending and low interest rates would lead to an economic rebound later this year.
But hopes seem to fade after dour outlooks from tech heavyweight Intel Corp., computer maker Lenovo Group Ltd and aluminium producer Alcoa Inc., among others. A worse-than-expected reading of the US labour market only added to investor fears.
India’s market, which plunged on Wednesday after Satyam Computer Services Ltd chairman B. Ramalinga Raju admitted doctoring the firm’s accounts for several years, was closed for a holiday. But Tokyo’s Nikkei 225 stock average lost 362.82 points, or 3.9%, to 8,876.42, snapping a seven-day winning streak as the yen traded higher, and Hong Kong’s Hang Seng Index fell 571.55 points, or 3.8%, to 14,415.91.
Elsewhere South Korea’s Kospi shed 1.8%, Australia’s benchmark dropped 2.3% and Taiwan’s key index lost 5.3%.
European shares followed Asia lower in early trade, though the losses weren’t as steep. Britain’s FTSE 100 was off 0.2%, Germany’s DAX shed 0.7% and France’s CAC 40 dropped 0.4%.
Weighing on global trade was overnight weakness on Wall Street. US investors sent stocks sharply lower after Intel warned about poor business conditions and an employment survey showed the private sector shed a greater-than-expected 693,000 jobs in December, fraying nerves ahead of Friday’s employment report from the government.
The Dow tumbled 245.40 points, or 2.7%, to 8,769.70, its biggest point and percentage decline since 1 December.
Broader stock indicators also tumbled, with the S&P 500 index falling 28.05 points, or 3%, to 906.65.
News on the corporate front in Asia was grim too. Shares in Lenovo Group plunged 26% in Hong Kong trade after the world’s fourth largest computer maker warned it expects a loss for its latest quarter and will lay off 11% of its workforce and cut executive pay.
In Australia, shares in Macquarie Group Ltd dropped 3.7% after the country’s leading investment bank said “exceptionally challenging” market conditions in the fourth quarter would hurt profits.
Across the region, energy and raw materials producers took a beating as commodity prices fell sharply overnight. Australia’s BHP Billiton Ltd, the world’s largest mining company, skidded 5.7%, and Chinese oil producer China National Offshore Oil Corp. lost 6.7% in Hong Kong.
Alex Kennedy in Singapore contributed to this story.
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First Published: Thu, Jan 08 2009. 10 19 PM IST