Asian stocks slumped for a third week amid mounting concern the financial crisis is “reigniting” as the deepening global recession cut into corporate profits.
HSBC Holdings PLC, Europe’s largest bank, lost 11 percent for the week after the UK and US governments were forced to provide new bailouts for banks and New York University professor Nouriel Roubini said credit losses could surpass US$3 trillion. Sony Corp plunged 13 percent after forecasting a record loss, while Samsung Electronics Co, the world’s largest liquid-crystal display TV maker, dropped 5.8 percent after posting its first quarterly loss.
The MSCI Asia Pacific Index slid 5.2 percent last week to 80.32, the lowest level since Dec. 5. The benchmark measure fell for a third consecutive week, the first time since October it has done so.
Financial companies posted the biggest declines on the benchmark index, which slumped by a record 43 percent last year as the credit crunch tipped the world’s largest economies into recession, forcing companies to cut jobs amid slumping profits.
Japan’s Nikkei 225 Stock Average lost 5.9 percent in the week as the yen’s climb to the highest since 1995 against the dollar added to exporters’ woes. Most benchmark indexes retreated across the region, except in China, where the central government unveiled additional measures to support the economy.
Concerns banks will be nationalized weighed on shares of lenders throughout the world. The UK government moved to raise its stake in Royal Bank of Scotland Group PLC, while Bank of America Corp received a bailout and was forced to slash its dividend to US$0.01.
HSBC tumbled 11 percent to HK$57.45 (US$7.40). Morgan Stanley and Goldman Sachs Group Inc have predicted the bank, which gets about a fifth of its revenue in North America, may have to raise additional capital.
US financial losses from the credit crisis may reach US$3.6 trillion, suggesting the banking system is “effectively insolvent,” Roubini, who predicted last year’s economic crisis, said on Tuesday. Institutions worldwide have so far reported writedowns and losses of more than US$1 trillion.
Mizuho Financial Group Inc, Japan’s second-largest listed lender, dropped 15 percent to ¥212 (US$2.39). National Australia Bank Ltd., the country’s biggest by assets, slumped 12 percent to A$16.94.
Sony, the maker of PlayStation3 game consoles, lost 13 percent to ¥1,802. The company said it expects a record ¥260 billion operating loss for the year ending in March amid falling demand, the strong yen and costs to restructure its business.
“Sony’s loss forecast was an order of magnitude greater than what some analysts had estimated,” Soichiro Monji, chief strategist at Daiwa SB Investments Ltd, which manages the equivalent of US$53 billion, said in an interview with Bloomberg Television. “The bad news about earnings and economies is accumulating.”
China last week reported its slowest rate of growth in seven years as the economy grew at an annualized 6.8 percent pace in the fourth quarter. South Korea’s central bank also said the country’s economy shrank a 5.6 percent last quarter, the biggest decline since the Asian financial crisis.
Samsung lost 5.8 percent to 442,000 won (US$323) as it reported a fourth-quarter net loss amid slumping demand for its computer chips, televisions and mobile-phone handsets.
TAIPEI
The TAIEX closed up 0.13 percent to 4,247,97 on Wednesday before the Lunar New Year holiday. Markets will reopen on Feb. 2.
Other regional markets:
KUALA LUMPUR: Down 0.7 percent. The Kuala Lumpur Composite Index fell 6.33 points to close at 872.69 points with a turnover of 277.13 million shares worth 388.36 million ringgit (US$107.43 million).
JAKARTA: Down 0.9 percent. The Jakarta Composite Index dropped 11.74 points to 1,315.59 in thin volume.
MANILA: Down 0.3 percent. The composite index lost 6.18 points to 1,857.34, while the all shares index shed 0.5 percent to 1,202.41.
WELLINGTON: Down 1.07 percent. The NZX-50 index fell 29.33 points to close at 2,705.09. Turnover was NZ$92.4 million (US$48.8 million).
MUMBAI: Down 1.58 percent. The benchmark 30-share SENSEX index was 139.49 points
UPDATED FORECAST: The warning covered areas of Pingtung County and Hengchun Peninsula, while a sea warning covering the southern Taiwan Strait was amended The Central Weather Administration (CWA) at 5:30pm yesterday issued a land warning for Typhoon Usagi as the storm approached Taiwan from the south after passing over the Philippines. As of 5pm, Usagi was 420km south-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost tip, with an average radius of 150km, the CWA said. The land warning covered areas of Pingtung County and the Hengchun Peninsula (恆春), and came with an amended sea warning, updating a warning issued yesterday morning to cover the southern part of the Taiwan Strait. No local governments had announced any class or office closures as of press time last night. The typhoon
Typhoon Usagi yesterday had weakened into a tropical storm, but a land warning issued by the Central Weather Administration (CWA) was still in effect in four areas in southern Taiwan. As of 5pm yesterday, Tropical Storm Usagi was over waters 120km south-southwest of Oluanpi (鵝鑾鼻), the southernmost tip of Taiwan proper, and was moving north at 9kph, CWA data showed. The storm was expected to veer northeast later yesterday. It had maximum sustained winds of 101kph, with gusts of up to 126kph, the data showed. The CWA urged residents of Kaohsiung, Pingtung County, Taitung County and the Hengchun Peninsula (恆春) to remain alert to
ONE LAST TALK: While Xi said that Taiwan was a ‘red line,’ Biden, in what is likely his last meeting with Xi as president, called for an end to China’s military activity around Taiwan China’s military intimidation and economic coercion against Taiwan are the main causes of tensions that are destabilizing peace in the Taiwan Strait, Taipei said yesterday while thanking US President Joe Biden for expressing Washington’s firm stance of maintaining peace and stability in the region. Biden and Chinese President Xi Jinping (習近平) met on Saturday for their third meeting and their first talks in seven months on the sidelines of the APEC forum in Lima, Peru. It was likely Biden’s last meeting as president with Xi. During their conversation, Biden reiterated the US’ opposition to any unilateral change to the “status quo” from either
Taiwan would participate in the 2026 APEC summit to be hosted by China after Beijing promised it would ensure the personal safety of attendees, Taiwanese national security sources said yesterday. The APEC Leaders’ Machu Picchu Declaration announced yesterday said that China would host the APEC summit in 2026. Beijing proposed hosting the summit shortly before this year’s gathering began on Friday, a national security official said, speaking on condition of anonymity. Many APEC members expressed concerns about China hosting the event and said that prior communication over the decision was insufficient, the official said. Taiwan brought up concerns about legal “guidelines” China announced in
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