Asia stocks slip on grim corporate outlooks

Asia stocks slip on grim corporate outlooks
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First Published: Mon, Feb 02 2009. 08 46 AM IST
Updated: Mon, Feb 02 2009. 08 46 AM IST
Hong Kong: Asian stocks slipped on Monday while the yen and US dollar advanced, with investors expecting another week of grim news on corporate earnings and the global economy.
Rising inventories and a severe pullback in consumer demand in the face of a global economic crisis have had a shock effect on companies around the world and many have been slashing their forecast results for 2009. Hitachi Ltd stocks tumbled 18% after it warned of a record annual loss.
Dismal US economic reports as well as uncertainty about a massive fiscal stimulus package in Washington helped spark the worst Wall Street January performance ever. US Treasury bonds meanwhile have provided little solace since dealers have been lately more concerned about the government’s growing borrowing needs to finance multiple rescue plans.
“There’s no question that the global economy has worsened a notch more, and concerns about this will be in a tug-of-war with expectations for economic stimulus policies,” said Hiroichi Nishi, general manager at the equity division of Nikko Cordial Securities in Tokyo.
Japan’s Nikkei share average fell 0.5%, down for a second day. In addition to Hitachi, shares of bearing maker NTN Corp and Fujifilm Holdings Corp both fell after the companies slashed their profit outlooks.
In Australia, where the benchmark stocks index was down 1 percent, shares of miner Rio Tinto Ltd were up 6.2% after state-owned Chinese aluminium company Chinalco held talks with Rio to take a stake in the firm.
Stocks in Asia-Pacific outside Japan were down 1.1%, according to an MSCI index.
Hong Kong’s Hang Seng index fell 2%, weighed by a 1.6% decline in HSBC. Europe’s largest bank has seen its Hong Kong-listed stock post a sixth consecutive month of declines in January.
The yen rose against major currencies, proving the haven of choice for global investors seeking safety.
The US dollar was at ¥89.65, slipping 0.3% from late US trade on Friday. The euro declined 0.8% to ¥114.38.
The euro dipped to a two-month low against the dollar around $1.2715 amid anxiety about the slumping economy in Europe and ahead of a European Central Bank meeting this week.
The US crude oil future for March delivery has kept above $40 a barrel for about two weeks, with the market speculating on additional measures by Opec to put a floor under prices.
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First Published: Mon, Feb 02 2009. 08 46 AM IST
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