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Asia stocks fall on swine flu jitters

Asia stocks fall on swine flu jitters
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First Published: Mon, Apr 27 2009. 08 43 AM IST
Updated: Mon, Apr 27 2009. 08 43 AM IST
Hong Kong: Asian stocks slipped on Monday as the outbreak of swine flu in North America hurt shares of airlines and transport companies while prompting some market players to trim risky positions, hitting currencies like the Australian dollar.
Japan’s Nikkei average bucked the trend and rose 0.8% as drugmakers such as Chugai Pharmaceutical on an expected pick-up in flu drug sales, while banks jumped on news that Shinsei Bank was in merger talks with Aozora Bank.
Analysts said the initial market reaction was limited but were wary about the potential economic fallout from the flu outbreak, especially at a time when the global economy is starting to show signs of recovering from a deep recession.
Mexico’s health minister said the swine flu death toll in the country reached 103 as fears of a global pandemic grew with new infections in the United States and Canada.
Investors in Asia are all the more aware of the potential damage after the outbreak of SARS in Hong Kong six years ago hobbled the city and regional economy.
“This will deepen the global recession and will probably have a contagion effect on export-led economies in Asia,” said Daniel Chan, senior investment strategist at DBS Bank in Hong Kong.
The MSCI index of Asia-Pacific stocks outside Japan dropped 0.9% and was off a six-month peak struck earlier this month.
Hong Kong’s Hang Seng shed 2.2%, with Cathay Pacific Airways the biggest percentage loser on the index with a slide of 7%.
The Australian dollar -- the highest yielding of big currencies whose fortunes are tied closely to swings in stocks - shed 1.2% to $0.7140.
The dollar index, a gauge of its performance against six major currencies, climbed 0.4% to 85.099. But the dollar fell to a one-month low versus the yen at ¥96.62 as the Japanese currency gained broadly.
Commodities succumbed to the worries about demand due to the spreading flu virus. US crude oil futures were down 96 cents to $50.59 a barrel, while US soy and corn futures both tumbled nearly 4%.
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First Published: Mon, Apr 27 2009. 08 43 AM IST
More Topics: Markets | Global | Asia | Swine Flu | Nikkei |