Asian stocks dropped for the second straight week on concern that companies will book losses from Dubai’s plan to delay debt payments and that share sales by banks will erode the value of existing holdings.
Kajima Corp fell 16 percent after Daiwa Securities SMBC Co said Japanese builders may lose “tens of billions of yen” if Dubai’s investment fund succeeds in delaying debt payments. Bank of China Ltd (中國銀行), which said this week it’s studying options to replenish capital, dropped 13 percent. Sony Corp, the maker of the PlayStation 3 game console, slid 6 percent as the US dollar sank to a 14-year low against the yen. Santos Ltd, Australia’s third-biggest producer of oil and gas, slumped 4.6 percent as crude oil prices retreated in New York.
The MSCI Asia-Pacific Index fell 2.6 percent to 113.90 this week, dragged down the most by financial companies. The gauge has climbed 61 percent from its lowest level in more than five years on March 9, amid signs government stimulus measures are reviving economies around the world.
“People are worried about the contagion effect from Dubai,” said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors, which oversees US$75 billion. “Events like this bring back all the bad memories from the global financial crisis. The market has rallied a long way and is very sensitive to any bad news around debt default or financial problems.”
Japan’s Nikkei 225 Stock Average index lost 4.4 percent for a fifth weekly drop, even as exports last month fell at the slowest pace in a year as government spending helped bolster demand.
South Korea’s KOSPI Index sank 5.9 percent, during a week in which a central bank survey showed manufacturers’ confidence slipped to the lowest level in four months.
Hong Kong’s Hang Seng Index declined 5.9 percent, and the Shanghai Composite Index retreated 6.4 percent. Vietnam’s VN Index tumbled 12 percent as the central bank devalued the currency to curb inflation and narrow the trade deficit.
Taiwanese shares are expected to see further falls next week after Dubai’s shock call to suspend the debt of a key state firm caused new jitters over the global financial health, dealers said on Friday.
However, the government may step in to support the market and offset the pressure, wary of allowing too somber a mood ahead of local elections scheduled for Saturday, according to dealers.
For the week to Friday, the weighted index fell 192.06 points or 2.50 percent to 7,490.91 after a 0.23 percent increase a week earlier.
Average daily turnover stood at NT$120.85 billion, compared with NT$134.30 billion a week ago.
Other regional markets on Friday:
SYDNEY: Down 2.90 percent from Thursday. The S&P/ASX 200 suffered its biggest one-day fall in five months, losing 136.5 points, to end at 4,572.1.
BANGKOK: Down 0.78 percent from Thursday. The SETlost 5.36 points to close at 680.37.
MANILA: Down 1.45 percent from Thursday. The composite index shed 44.85 points to 3,044.97.
WELLINGTON: Down 1.05 percent from Thursday. The NZX-50 index fell 32.88 points to 3,094.44
MUMBAI: Down 1.32 percent from Thursday. The SENSEX fell 222.92 points to 16,632.01.
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