Asian stocks, US index futures and the dollar tumbled after the Senate rejected a bailout for US automakers, threatening to deepen the global recession. Treasuries rallied and yields fell to record lows.
The MSCI Asia Pacific Index lost 3.5 percent to 84.97 as of 4:20pm in Tokyo after senators voted down a bill to provide US$14 billion in emergency funds for General Motors Corp and Chrysler LLC. Honda Motor Co and Nissan Motor Co plunged more than 11 percent. The US dollar fell to a 13-year low against the yen, while the cost of protecting Asian bonds against default advanced. Metals and crude oil prices slumped.
“Investors have been betrayed again by US politiciansm” said Yasuhiro Miyata, who helps manage about US$109 billion at DIAM Co in Tokyo. “Even with the knowledge that we are in the midst of a crisis, they were unable to come to an agreement and investors have decided to abandon ship. This could have a substantial effect on unemployment.”
AFP
Futures on Standard & Poor’s 500 Index sank 4.3 percent. The measure dropped 2.9 percent yesterday, as General Motors shares plunged 10 percent, extending an 83 percent annual decline.
Japan’s Nikkei 225 Stock Average retreated 5.6 percent to 8,235.87. The CSI 300 Index sank 3.8 percent in China, after a government official said growth will slow more sharply next quarter. China Mobile Ltd. fell 7.1 percent in Hong Kong.
South Korea’s Kospi Index lost 4.4 percent, led by KB Financial Group Inc, after the Bank of Korea said the economy will expand at the slowest pace in 11 years next year.
TAIPEI
Taiwanese shares were expected to weaken next week amid uncertainty over the US auto industry’s fate, dealers said on Friday.
Fears have escalated that a possible failure to rescue the auto sector would significantly boost the already high US unemployment rate and further drag down US demand, hurting Taiwan’s exports, they said.
Market sentiment remains cautious ahead of a US Federal Reserve Board policy meeting scheduled for tomorrow, they said.
The Taiwanese market is expected to test the 4,200 point support level next week, while any technical rebound during trade may encounter strong resistance at around 4,700 points, dealers said.
For the week to Dec. 12, the weighted index fell 256.20 points or 6.06 percent to 4,481.27 after a 5.28 percent decline a week earlier.
Average daily turnover stood at NT$85.11 billion (US$2.56 billion), compared with US$54.83 billion a week ago.
The market closed 3.74 percent lower on Friday as investors rushed to take profit after the US Senate reached no deal to keep the Big Three automakers afloat.
“I expect the selling will continue into next week as pessimism towards the US economy seems to run deeper due to the botched rescue plan,” President Securities analyst Steven Huang said.
Huang said the electronic sector may face greater pressure as it has been battered by falling US consumption.
Last month, Taiwan recorded a 23.3 percent decline in exports, marking the steepest fall since October 2001.
Other regional markets:
KUALA LUMPUR: Malaysian shares closed 0.1 percent down. The Kuala Lumpur Composite Index shed 8.41 points to close the day at 852.27 off an intraday low of 848.05.
BANGKOK: Thai share prices closed almost flat, just 0.04 percent higher.
JAKARTA: Indonesian shares ended 4.1 percent lower.
The Jakarta Composite Index fell 54.72 points to 1,261.97 in moderate volume.
MANILA: Philippine shares closed two percent lower.
WELLINGTON: New Zealand shares closed 1.82 percent lower.
The benchmark NZX-50 index fell 49.76 points to 2,676.95 on light turnover worth 70.6 million dollars (US$38.9 million).
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
GEOPOLITICAL CONCERNS: Foreign companies such as Nissan, Volkswagen and Konica Minolta have pulled back their operations in China this year Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth. China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year. Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions,
‘SOMETHING SPECIAL’: Donald Trump vowed to reward his supporters, while President William Lai said he was confident the Taiwan-US partnership would continue Donald Trump was elected the 47th president of the US early yesterday morning, an extraordinary comeback for a former president who was convicted of felony charges and survived two assassination attempts. With a win in Wisconsin, Trump cleared the 270 electoral votes needed to clinch the presidency. As of press time last night, The Associated Press had Trump on 277 electoral college votes to 224 for US Vice President Kamala Harris, the Democratic Party’s nominee, with Alaska, Arizona, Maine, Michigan and Nevada yet to finalize results. He had 71,289,216 votes nationwide, or 51 percent, while Harris had 66,360,324 (47.5 percent). “We’ve been through so
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