Asian stocks tumbled yesterday, as a fresh round of jitters about the health of major banks eclipsed any optimism ahead of Barack Obama’s inauguration as US president. European markets opened higher following a sell-off the day before.
Positive sentiment from hopes an Obama administration would act aggressively to bolster the faltering US economy faded amid an onslaught of bad news overnight.
Royal Bank of Scotland forecast a £28 billion (US$41.3 billion) loss for last year, the British government announced plans for a second banking bailout, and the European Commission said the euro-zone economy will shrink 1.9 percent this year. US markets were closed on Monday for the Martin Luther King Jr holiday.
Investors were now bracing for a second wave of banking crises, fearing that many ailing banks have grown “too big” for governments to effectively handle, said Francis Lun (藺常念), general manager at Fulbright Securities (富昌證券) in Hong Kong.
“The results by Citigroup, Bank of America and RBS send a wake-up call to the treasury secretaries of the world that nothing really worked,” Lun said, referring to already announced measures to prop up lenders. “Now we’re almost back to square one.”
Japan’s Nikkei 225 stock average lost 2.3 percent to 8,065.79, paring losses in the afternoon after dipping under the key 8,000-level during the morning session.
“RBS was always seen as one of the weaker banks, and investor fears about its health were reconfirmed,” said Hideaki Higashi, equity strategist at SMBC Friend Securities in Tokyo. “This in turn renewed concerns about the banking system.”
Elsewhere, Hong Kong’s Hang Seng index lost 2.9 percent and Australia’s S&P/ASX200 fell 3.1 percent. Benchmarks in South Korea and Singapore also retreated.
As European markets opened, Britain’s FTSE 100 jumped 1.7 percent, Germany’s DAX rose 1.12 percent and France’s CAC-40 was up 1.1 percent.
US stock futures suggested a weaker open on Wall Street. Dow futures were down 38 points, or 0.5 percent, at 8,205 and S&P500 futures fell 3.8, or 0.5 percent, to 844.80.
Chinese shares bucked the trend in Asia on hopes the government would soon release its stimulus plan for the petrochemical sector.
The benchmark Shanghai Composite Index closed up 1.4 percent, buoyed by steel producers and medical issues, which surged after China reported several bird flu death cases recently.
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).