Stocks slip on rising crude, quake impact

Stocks slip on rising crude, quake impact
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First Published: Tue, May 20 2008. 11 36 PM IST
Updated: Tue, May 20 2008. 11 36 PM IST
Hong Kong: Asian markets dropped on Tuesday as sentiment eroded after last week’s earthquake in China and worries grew over the impact of rising oil prices. Chinese markets suffered the biggest losses amid reports that damage in Sichuan province was greater than expected. The Shanghai Composite Index fell 4.5% to 3,443.22.
In Hong Kong, the blue-chip Hang Seng Index shed 2.2% to close at 25,169.46. Tokyo’s Nikkei 225 index slipped 0.8% to 14,160.09.
With the quake’s aftermath souring the markets’ mood, traders sought to lock in recent gains. “Some reports show much bigger losses than earlier estimated, and that naturally makes investors worried,” said Zhang Xiuqi, an analyst at Guotai Junan Securities in Shanghai.
Pharmaceutical stocks, which soared following the disaster, were especially hard hit in Shanghai.
Southwest Synthetic Pharmaceutical fell the 10% trading limit after rising 8.4% on Monday. Northeast Pharmaceutical Group also lost 10%.
In Hong Kong, stocks plunged on worries over the impact of high oil prices and as weakness in other markets hurt sentiment. Energy companies led the way. Shenhua Energy Co. fell 1.7% after rising 6.9% on Monday. Cnooc Ltd slipped 1.4% after gaining nearly 10% in the past six sessions. Sinopec tumbled 4.3%.
Chinese airlines listed in Hong Kong bucked the trend, rising on hopes of direct China-Taiwan air links.
Taiwan’s new president, Ma Ying-jeou, reiterated on Tuesday his plan to introduce weekend charter flights between the island and the mainland and allow more Chinese tourists to visit from July.
Investors in Tokyo, facing a dearth of fresh incentives, sold banking and real estate stocks. Sumitomo Realty and Development Co. Ltd lost 4.7%, while Mitsubishi Estate Co. Ltd declined 3.6%.
Oil prices held steady Tuesday after closing overnight above $127 (Rs5,423) for the first time on news that the Organization of the Petroleum Exporting Countries will not increase its output before its next meeting in September.
In other markets, Taiwan’s benchmark index closed down 2.4% after a series of gains in the run-up to Ma’s Tuesday inaugural address. Stocks in South Korea, Australia, Singapore and New Zealand also lost ground.
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First Published: Tue, May 20 2008. 11 36 PM IST
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