Asian markets slide on renewed U.S. credit worries

(RTTNews) - The stock markets across the Asia-Pacific region were trading sharply lower Tuesday after Wall Street plunged overnight on weakness within the financial sector and a rise in the price of oil. Investor sentiment was also dampened after U.S. investment bank, Merril Lynch, said after the market closed Monday in the U.S. that it will take a $5.7 billion pre-tax writedown in the third quarter due to losses on its sale of mortgage assets and that it is planning to raise at least $8.5 billion by selling new common shares.

Crude oil prices rose by $1.47 a barrel on Monday in the New York session to settle at $124.73 a barrel after militant attacks hampered Nigerian oil production and Iran heightened geopolitical tensions by saying that it was rapidly expanding its nuclear program.

On the currency front, the U.S. dollar weakened to mid 107-yen levels in early Tokyo deals from upper 107-yen levels late Monday, while the South Korean won opened lower at 1,009.4 a dollar. The Aussie started off firmer at US$0.9566-0.9571 and the kiwi held steady against the greenback at US$0.7445.

The Japanese stock market was trading lower, led banking stocks. At 8.37 PM E.T., the benchmark Nikkei 225 Index was losing 258.12 points or 1.93% to 13,095.66, while the broader Topix index of all First Section Issues was declining 22.18 points to 1,269.81.

On the economic front, the jobless rate in Japan climbed to 4.1% in June, an increase of 0.1% from May, according to data released by the Ministry of Internal Affairs and Communications. Unemployment hit its highest rate since it touched 4.3% in June 2006. The government also reported the jobs-to-applicants ratio declined to 0.91 in June from 0.92 in May, and is at the lowest level since February 2005.

In another indicator that Japan's economy is slowing, the Ministry of Internal Affairs and Communications reported that average monthly household spending in the country declined 1.8% in June from the same period of the prior year. It marked the fourth straight month of declines in household spending. Overall household income fell 2.1%, with income by heads of households down 4.1%.

Meanwhile, Japan's overall retail sales increased 0.3% in June, climbing for the eleventh consecutive month, the Ministry of Economy, Trade and Industry said. In May, retail sales rose a revised 0.3% on year. On a monthly basis, retail sales were flat after a 0.1% decline in May.

Among banks, Mizuho Financial shed 4.05%, Sumitomo Mitsui remained lost 3.43%, Mitsubishi UFJ slipped 2.67% and Resona Holdings declined 1.91%. The auto sector too lost ground. Honda dropped 4.11%, Toyota dipped 3.17%, Suzuki declined 1.04% and Mitsubishi Motors lost 1.65%.

In the tech space, Advantest slid 3.92%, Fanuc lost 2.72%, NEC declined 2.05%, Tokyo Electron eased 0.51% and Fujitsu remained unchanged. Among consumer product companies, Canon slid 2.96%, Sony shed 2.07%, Toshiba lost 2.19% and Olympus edged down 0.27%.

In the oil sector, Inpex Holdings rose 1.49%, while Showa Shell slipped 1.15% and Nippon Oil gave away 1.18%.

Tokyo Electric Power declined 1.54%. On Monday, the company forecast a record loss for the current financial year, hurt by soaring energy prices and the indefinite closure of a quake-hit nuclear power plant.

Meanwhile, companies including Mitsubishi Motors, Sony, Nomura Holdings and Toshiba are slated to announce their financial results today.

The South Korean market was trading sharply lower following a flat close on Monday. At 9:11 p.m. ET, the benchmark Korea Composite Stock Price Index or KOSPI was down 44.65 points or 2.79% at 1,553.64.

Among technology stocks, Hynix Semiconductors plunged 4.1% and market heavyweight Samsung Electronics fell 2.0%. LG Electronics slumped 5.9% and LG Display plummeted 3.8%.

Automaker Hyundai Motor tumbled 3.7% and steel major POSCO dropped 1.9%. Leading lender KookMin Bank gave away 2.6%, Shinhan Financial Group declined 3.4% and Woori Finance dropped 4.6%. Brokerage Mirae Asset Securities lost 4.3%.

The Australian stock market was trading sharply lower, extending losses for a third straight trading session. At 9:19 p.m. ET, the benchmark S&P/ASX 200 index was down 77 points or 1.57% at 4,845 and the broader All Ordinaries index was losing 70 points or 1.40% to 4,920.

On the economic front, the Conference Board issues its leading economic index and coincident index for Australia. The National Australia Bank business survey for the June quarter will also be released.

Banks continued to be weak because of credit writedowns. Commonwealth Bank dropped 4.09%, Westpac slid 1.77%, while ANZ Bank edged up 0.38%. National Australia Bank was down 1.51%, St. George bank declined 2.25% and investment bank Macquarie Group dropped 3.18%.

In the resources sector, index leader BHP Billiton was up 1.05% and Rio Tinto added 1.52%. Gold miners were mixed after gold closed marginally higher on Monday, taking a lead from oil prices. Lihir Gold edged down 0.68%, but Newcrest Mining was up 1.12%.

Among energy stocks, Woodside gained 3.70%, Oil Search edged up 0.91% and Santos added 2.98%.

In the retail sector, David Jones was down 1.79%, while Coles owner Wesfarmer edged up 0.20%, and Woolworths lost 0.80%.

Industrial products supplier Alesco dropped nearly 11% even though the company posted a 32% rise in full-year profit. Alesco warned that its outlook was challenging as consumer demand had softened.

The New Zealand market opened lower, reversing Monday's moderate gains. The benchmark NZX50 index was down 23.67 points or 0.73% to 3, 232.89 shortly after the market opened for the day. Meanwhile the NZX All Capital Index fell 23.08 points or 0.70% to 3, 280.55.

In the early trading on the New Zealand stock market on Tuesday, top ranked share Telecom posted a loss of 1.66%, while the second ranked Contact Energy dropped 0.24%. Fletcher Building, the third best stock, slipped 1.69%.

In the retail sector Hallenstein Glasson and Warehouse remained unchanged in the day's early trading, while Pumpkin Patch collected 0.71%.

In the energy sector TrustPower fell 0.26%, while Vector remained unchanged.

Among other notable stocks Nuplex fell 2.04%, while the jeweler Michael Hill remained unchanged. Sky Network Television gained 1.11%, while Sky City gave up 2.94%. Steel & Tube Holdings surged 6.67%, while Infratil dropped 3.17%.

Among the dual listed issues Australia and NZ Banking Corp eased 0.05%, while AMP, Lion Nathan, Telstra and Westpac Bank remained unchanged.

Early gainers were few and included New Zealand Oil & Gas by 0.65% and Property For Industry by 0.85%.

Decliners outnumbered the gainers in the early trading and included- Auckland International Airport by 0.54%, Air New Zealand by 1.60%, Fisher & Paykel Appliances by 1.01, Fisher & Paykel Healthcare by 0.78%, Freightways by 0.99%, Goodman Fielder by 2.33%, NZ Farming Systems by 1.10%, Pike River Coal by 1.01% and Ryman Healthcare by 1.79%.

Other Asian markets:

Hong Kong's Hang Seng index was down 2.4% at 22,136; China's Shanghai composite index was down 1.7% at 2,853; Singapore's Straits Times index was down 1.5% at 2,866; Taiwan's weighted index was down 3.4% at 6,989; Malaysia's KLCI was down 5.1 points at 1,148; and Indonesia's Jakarta Composite index was down 0.9% at 2,254.

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