Hong Kong: Asia’s stocks took a beating for a second day running on Wednesday as investor fear sank in at the start of the corporate earnings season.
Hong Kong led the major markets down, losing at least 3%, while Tokyo’s Nikkei was 2.69% off and Sydney 2.34% down. There were also heavy losses for Shanghai, which dived 3.76%, and Seoul, which lost almost 3%.
Glum outlook: A man at a stock indicator in Japan on Wednesday. Shizuo Kambayashi / AP
The downward momentum followed a miserable day on Wall Street where the Dow Jones dropped 2.3%. The US corporate earnings season began on a sour note as Alcoa Inc. posted a net loss of $497 million (Rs2,509 crore), with prices and demand down dramatically in the face of the global slowdown.
Francis Lun, general manager of Fulbright Securities Ltd, a Hong Kong brokerage, said investors in Asia were “scrambling for an exit” after the tumble on Wall Street.
Fears for the financial sector deepened after The Times of London reported new forecasts from the International Monetary Fund (IMF) are set to suggest toxic debts racked up by banks and insurers could reach $4 trillion.
Japan’s Nikkei-225 is down 2.69%. It fell 237.84 points to 8,595.01. “Investors are finding it difficult to find signs of an economic bottom” ahead of earnings results from the US financial sector, Daiwa Securities SMBC Co. Ltd market analyst Yumi Nishimura told Dow Jones Newswires.
Corporate news in Japan added to the glum mood.
Sharp Corp. fell 6.1% to 813 yen (Rs41,219) after it slashed its earnings outlook for fiscal 2008, estimating a net loss of 130 billion yen compared with a previous estimate of 100-billion-yen loss. Shipping company Kawasaki Kisen Kaisha Ltd dropped 4.1% to 349 yen. Sumitomo Mitsui Financial Group Inc. fell 3.9% to 3,430 yen.
Hong Kong’s Hang Seng Index fell 3.04%. It closed down 454.11 points at 14,474.86. Traders said a correction of the index is long overdue, after it rose around 20% in the past month. Peter Lai, a director at DBS Vickers, said the index is likely to fall below 14,000 in the near-term as the economic outlook remains sluggish.
Sentiment was also hit by local media reports, which said Cheung Kong (Holdings) Ltd will sell a new residential project at prices 25% below a nearby project by New World Development Co. Ltd, raising concerns of a price war.
HSBC Holdings Plc. fell 5.6% to $48.35 on a selloff ahead of the debut of its new shares in Hong Kong on Thursday.
Australia’s S&P/ASX 200 fell 2.34%. It lost 86.8 points to 3,619.5. Financials and resources led the way lower, dealers said. National Australia Bank Ltd fell 4.42% and ANZ Banking Group Ltd dropped 4.12%. BHP Billiton Ltd dropped 2.81%, while rival Rio Tinto Group eased 0.7%.
China’s Shanghai Composite Index is down 3.76%. The benchmark index which covers A and B shares, was 91.80 points lower at 2,347.39. Profit taking in financial and real estate stocks dragged down the market, dealers said.
The key index tumbled to the lowest level since 25 March when it settled at 2,291.55, after hitting a more than seven-month high in the previous session. Industrial and Commercial Bank of China Ltd fell 3.4% to 3.97 yuan.
South Korea’s Kospi is down 2.93%. The index lost 38.03 points to close at 1,262.07. “Profit-taking demand has gotten stronger after the Kospi rallied about 30% (from its March low),” Oh Hyun-Seok, an analyst at Samsung Securities Co., said.
The Kospi will likely undergo a downward correction until it reaches the 20-day moving average of around 1200, Oh added. Samsung Electronics Co. plunged 4.62% to 557,000 won and Hynix Semiconductor Inc. fell 2.1% to 14,000 won.
Singapore’s blue-chip Straits Times Index is down 1.02%. It closed 18.43 points down at 1,783.96. “While the worst appears to be over... the recovery process is still slow; we see some near-term correction ahead,” said Carmen Lee, head of research for Oversea-Chinese Banking Corp.
DBS Group Holdings Ltd shed 33 cents to $8.50 and Singapore Airlines Ltd eased 2 cents to $10.98.
Malaysia’s KLCI is down 1.3%. The index dropped 11.97 points to 907.87. Investors are waiting for new premier Najib Razak to unveil his cabinet on Thursday, with expectations for a streamlined team aimed at helping him push through promised reforms.
Stock Exchange of Thailand is up 0.23%. The composite index edged up 1.01 points to close at 443.57. The market was buoyed by last-minute buying of energy stocks and after a peaceful start to a mass anti-government rally in Bangkok, analysts said. Bangkok Bank dropped 1.25 baht to close at 77.75 baht, while Kasikornbank shed 0.25 baht to 49.75.
Indonesian shares are down 1.68%. The Jakarta Composite Index fell 25.11 points to 1,465.75 in moderate volume. “Some investors think it is safer to take cash ahead of parliamentary elections tomorrow (Thursday),” a trader said. PT Bank Rakyat Indonesia dropped 8.3% to 4,675 rupiah, PT Bank Mandiri fell 4.4% to 2,150, while PT Bank Danamon Indonesia slid 3.1% to 2,350.
Philippines’ composite index is up 1.03%. It gained 21.12 points to 2,072.81. The market ended on a high on last-minute buying of blue chips ahead of the Easter break, dealers said. Philippine Long Distance Telephone Co. gained 1.83% to 2,220 pesos while Energy Development Corp. rose 2.29% to 4.45 pesos.
New Zealand share prices are down 1.67%. The benchmark NZX-50 Index fell 43.57 points to 2,568.90. “We are entering a period of profit-taking,” said Grant Williamson, director at stockbrokers Hamilton, Hindin, Greene.
“The weak offshore markets are weighing on stocks and weakness is pretty much across the board,” he said, adding that investors’ appetite for risk was again declining. Market leader Telecom New Zealand Ltd fell 12 cents to $2.37 and Contact Energy Ltd dropped 25 cents to $5.70.
India’s Sensex is up 1.97%. The 30-share benchmark index rose 207.47 points to 10,742.34, its fifth straight day of gains.