Sponsored by: Investment Center

Something new in your business?  Click here to submit your business press release

Chamber Corner | Main Street News | Job Hunt | Classifieds | Calendar | Illinois Lottery 

Asia stocks tumble amid renewed economy worries

Send a link to a friend

[January 08, 2009]  HONG KONG (AP) -- Asian stock markets fell sharply Thursday, with benchmarks in Tokyo and Hong Kong tumbling about 4 percent, as more evidence of company woes and a weak U.S. job market rekindled worries about the unfolding global slump. European markets opened lower.

Every major market in Asian suffered declines, marking an end to a New Year's rally that had been spurred by speculation that massive government spending and low interest rates would lead to an economic rebound later this year.

But hopes seem to fade after dour outlooks from tech heavyweight Intel, computer maker Lenovo and aluminum producer Alcoa, among others, highlighted the toll that the economic slump is taking on companies around the world. A worse-than-expected reading of the U.S. labor market only added to investor fears.

"The economic reality is sinking in for investors and 'the hope rally' that many thought would last until Obama's inauguration seems to be at least fizzling for now," said Kirby Daley, senior strategist at Newedge Group in Hong Kong. "While there is potential for a bear market rally to re-emerge, I would be very leery of buying at current levels."

Tokyo's Nikkei 225 stock average lost 362.82, or 3.9 percent, to 8,876.42, snapping a seven-day winning streak as the yen traded higher, and Hong Kong's Hang Seng Index fell 571.55 points, or 3.8 percent, to 14,415.91.

Elsewhere South Korea's Kospi shed 1.8 percent, Australia's benchmark dropped 2.3 percent and Taiwan's key index lost 5.3 percent. India's market, which plunged Wednesday after the chairman of major outsourcing company Satyam Computer admitted doctoring the firm's accounts for several years, was closed for a holiday.

European shares followed Asia lower in early trade, though the losses weren't as steep. Britain's FTSE 100 was off 0.2 percent, Germany's DAX shed 0.7 percent and France's CAC 40 dropped 0.4 percent.

Weighing on global trade was overnight weakness on Wall Street. U.S. investors sent stocks sharply lower after Intel warned about poor business conditions and an employment survey showed the private sector shed a greater-than-expected 693,000 jobs in December, fraying nerves ahead of Friday's employment report from the government.

The Dow average tumbled 245.40, or 2.7 percent, to 8,769.70, its biggest point and percentage decline since Dec. 1. Broader stock indicators also tumbled, with the S&P 500 index falling 28.05, or 3 percent, to 906.65. European markets fell sharply as well.

U.S. futures pointed to a mixed open in New York. Dow futures were down 35 points, or 0.4 percent, at 8,709 and S&P500 futures were up 0.3 point at 900.10.

As in the U.S., news on the corporate front in Asia was grim.

Shares in Lenovo Group plunged more than 26 percent in Hong Kong trade after the world's fourth-largest computer maker warned it expects a loss for its latest quarter and will lay off 11 percent of its workforce and cut executive pay.

[to top of second column]


Meanwhile, Cathay Pacific, Asia's No. 3 carrier, said it could lose nearly $1 billion from bad hedges on jet fuel and reiterated its profit warning for 2008, saying passenger and cargo traffic had weakened significantly. Cathay's shares shed 7.6 percent in Hong Kong.

In Australia, shares in Macquarie Group Ltd dropped 3.7 percent after the country's leading investment bank said "exceptionally challenging" market conditions in the fourth quarter would hurt profits.

Bank of China, the mainland's No. 3 lender, fell 8.4 percent in Hong Kong after billionaire Li Ka-shing's foundation sold more than $500 million worth of shares in the bank, becoming the latest investor to cut its investment in China's financial sector.

Across the region, energy and raw materials producers took a beating as commodity prices fell sharply overnight. Australia's BHP Billiton Ltd, the world's largest mining company, skidded 5.7 percent, and Chinese oil producer CNOOC lost 6.7 percent in Hong Kong.

After a higher-than-expected increase in U.S. inventories sparked a 12 percent plunge in crude overnight, oil prices were relatively steady in Asian trade Thursday.

Light, sweet crude for February delivery rose 54 cents to $43.17 a barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $5.95 overnight to settle at $42.63.

In currencies, the dollar weakened to 91.96 yen, down from 92.68. The euro traded lower at $1.3572 from $1.3611, though fluctuated in the session.

[Associated Press; By JEREMIAH MARQUEZ]

AP Writer Alex Kennedy in Singapore contributed to this report.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


< Recent articles

Back to top


News | Sports | Business | Rural Review | Teaching & Learning | Home and Family | Tourism | Obituaries

Community | Perspectives | Law & Courts | Leisure Time | Spiritual Life | Health & Fitness | Teen Scene
Calendar | Letters to the Editor