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Asia stocks slip as global recession fears rise

Asia stocks slip as global recession fears rise
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First Published: Wed, Oct 15 2008. 02 03 PM IST
Updated: Wed, Oct 15 2008. 02 03 PM IST
Reuters
Honk Kong: Most Asian stock markets fell 1-3% while gold rose on Wednesday on investor worries of lower corporate earnings in a weakening global economy, even as money markets continued to heal gradually.
Major European share markets were expected to open as much as 2% down , according to financial bookmakers, after the FTSEurofirst 300 index rose nearly 14 % in the last two days.
Oil prices were not far from a 12-month low hit on Friday while the yen and U.S. Treasuries climbed, reflecting fears the damage that the financial crisis inflicted on the global economy is still working its way through the system.
Quarterly reports have begun to trickle in, with JPMorgan Chase & Co and Merrill Lynch set to post their results this week. Investors will be focused on the outlook and whether most expectations for a rebound in 2009 will have to be reined in.
“While the financial system crisis appears to be heading in a positive direction, the economy appears to be increasingly bad, and this is raising worries about company earnings. We still don’t know how much these might be hit,” said Hiroaki Osakabe, a fund manager at Chibagin Asset Management in Tokyo.
The MSCI index of Asia-Pacific stocks outside of Japan fell 2.2% and is down 12.5% so far in October.
Hong Kong’s Hang Seng index slid 2.9%, snapping a two-day 14% rally. Shares of HSBC and China Construction Bank, one of the country’s largest banks, weighed the most on the index.
Japan’s Nikkei share average rallied to close up 1% after trading lower for most of the session. The index on Tuesday posted a record rise of 14.2%.
Earnings estimates have come way down for 2008, with some markets even set for overall losses in Asia. However, expectations for 2009 are still for growth well into the double digits in places like Hong Kong, Singapore and Taiwan, according to international estimates tracker IBES.
The upcoming results season could make analysts revisit those projections.
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First Published: Wed, Oct 15 2008. 02 03 PM IST