Asian stocks fell this week, dragging down the MSCI Asia-Pacific Index by the most since February last year, after US jobless claims unexpectedly rose and concern grew that Europe will fail to stop its debt crisis from spreading.
Honda Motor Co, a Japanese carmaker that gets about 80 percent of its sales overseas, sank 6.4 percent in Tokyo. Esprit Holdings Ltd, a clothier that earns 85 percent of its revenue in Europe, slid 8.9 percent in Hong Kong. Rio Tinto Group, the world’s third-largest mining company, slumped 9.1 percent in Sydney as oil and metal prices fell. Sonic Healthcare Ltd tumbled 23 percent in Sydney after cutting its profit forecast.
“A combination of events has made investors reassess the outlook for the global economy,” said Stephen Halmarick, Sydney-based head of investment-markets research at Colonial First State Global Asset Management, which holds about US$138 billion. “There’s clearly been a major reduction in risk appetite globally and it’s difficult to see the situation stabilizing in the near term.”
The MSCI Asia-Pacific Index slipped 6.7 percent to 111.98 this week, its lowest close since August last year. The index has fallen about 13 percent from a 20-month high on April 15, as Europe’s debt crisis and concern China will quell inflation eroded confidence in the global economic recovery.
China’s Shanghai Composite Index, which entered a bear market last week as China increased steps to cool its property market, sank 4.2 percent, and Hong Kong’s Hang Seng Index declined 3 percent in a holiday-shortened week.
Japan’s Nikkei 225 Stock Average declined 6.5 percent as Japan’s finance minister warned about continuing deflation.
The MSCI Asia-Pacific Index’s slump since last month erased its advance for this year, leading to a drop of about 7 percent this year.
That cut the average price of its stock to 14 times estimated earnings yesterday, the lowest level since January.
“This eurozone saga is turning into a bad horror movie,” Phillip Securities economist Joshua Tan told Dow Jones Newswires. “You think the monster is dead but it keeps coming back.”
Other markets on Friday:
Singapore ended down 1.90 percent, or 52.31 points, from Thursday at 2,701.20.
Manila closed 1.07 percent, or 34.44 points, lower from Thursday at 3,179.36.
Wellington dived 1.97 percent, or 61.34 points, from Thursday to close at 3,050.08.
The market is at its lowest level since Aug. 21 last year.
Bangkok was closed for a second straight day on Friday as the Thai capital clears up after deadly clashes between anti-government protesters and security forces earlier in the week.
US president-elect Donald Trump said he would “never say” if Washington is committed to defending Taiwan from China, but “I would prefer that they do not do it [ an attack],” adding that he has a “good relationship” with Chinese President Xi Jinping (習近平). “I never say because I have to negotiate things, right?” Trump said in an interview with NBC’s Meet the Press host Kristen Welker after saying he would not reveal his incoming administration’s stance on Taiwan’s defense in the event of an attack. Asked the question again, Trump, in a reference to China, said: “I would prefer that they
CROSS-STRAIT TENSIONS: MOFA demanded Beijing stop its military intimidation and ‘irrational behavior’ that endanger peace and stability in the Indo-Pacific region The Presidential Office yesterday called on China to stop all “provocative acts,” saying ongoing Chinese military activity in the nearby waters of Taiwan was a “blatant disruption” of the “status quo” of security and stability in the Indo-Pacific region. Defense officials said they have detected Chinese ships since Monday, both off Taiwan and farther out along the first island chain. They described the formations as two walls designed to demonstrate that the waters belong to China. The Ministry of National Defense yesterday said it had detected 53 military aircraft operating around the nation over the past 24 hours, as well
TECHNICAL LEAD: The US needs to boost its missile technology and build a communications network able to withstand hackers, Admiral Samuel Paparo said US Indo-Pacific Commander Admiral Samuel Paparo said the US is confident it could defeat China in the Pacific, but that technical advantage is shrinking, the Washington Post reported yesterday. Speaking at the Reagan Defense Forum on Saturday, Paparo said the US needs to maintain its technical lead over China by enhancing missile technology and building a communications network able to withstand hackers, the paper reported. Although the US is able to hit long-distance and difficult targets with its advanced cruise missile system, each launch costs more than US$1 million, he said. By contrast, drones, which are relatively cheap to build and develop, can
‘LAGGING BEHIND’: The NATO secretary-general called on democratic allies to be ‘clear-eyed’ about Beijing’s military buildup, urging them to boost military spending NATO Secretary-General Mark Rutte mentioning China’s bullying of Taiwan and its ambition to reshape the global order has significance during a time when authoritarian states are continuously increasing their aggression, the Ministry of Foreign Affairs (MOFA) said yesterday. In a speech at the Carnegie Europe think tank in Brussels on Thursday, Rutte said Beijing is bullying Taiwan and would start to “nibble” at Taiwan if Russia benefits from a post-invasion peace deal with Ukraine. He called on democratic allies to boost defense investments and also urged NATO members to increase defense spending in the face of growing military threats from Russia
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