Asian markets slide on oil, U.S. economic concerns

(RTTNews) - The stock markets across the Asia-Pacific region closed lower on Monday, as rising oil prices revived inflation fears and Wall Street's decline Friday amid a steep quarterly loss reported by General Motors and a contraction in U.S. jobs renewed concerns about the strength of the World's largest economy. Investors were also cautious ahead of the Fed's monetary policy decision on Tuesday.

Oil continued higher in the Asian session Monday after closing up $1.02 at $125.10 a barrel on supply concerns due to Iran's nuclear activities, violence in Nigeria and a tropical storm in the Gulf of Mexico.

The U.S. dollar strengthened to the upper 107-yen levels in late Tokyo deals from mid 107-yen levels in early trade and late Friday. The greenback also gained against the South Korean won. The Australian dollar closed weaker at US$0.9313-0.9316 and the kiwi finished the session higher at US$0.7286.

The Japanese market closed sharply lower after losing 2.1% on Friday. The key Nikkei index fell below the 13,000 mark for the first time in two weeks, as dismal earnings outlook for Japanese companies and uncertainty about the U.S. economy weighed on investor sentiment. The benchmark Nikkei 225 index closed down 161.41 points or 1.23% at 12,933.18. The broader Topix index of all the First Section issues on the Tokyo Stock Exchange lost 24.68 points or 1.94% to finish at 1,248.25.

On the economic front, the Bank of Japan said that Japan's monetary base fell 0.7% to 87.85 trillion yen in July from a year earlier, marking the first fall in two months. Later in the day, Japan Machine Tool Builders Association releases preliminary data on machine tool orders for the month of July.

The auto sector was weak after U.S. car sales dropped 13% in July from the same month last year and Nissan Motor reported Friday that its group net profit in the April-June quarter slumped 42.8% from a year earlier. Toyota Motor fell 3.3% after its U.S. sales dropped 12% on year during the period. Nissan Motor plunged 4.8%, Honda Motor tumbled 4.3% and Mitsubishi Motors plummeted 4.0%.

Among major exporters, Cannon fell 2.2%, Komatsu slumped 5.6% and Sony declined 2.4%. Banks were weak, with Mitsubishi UFJ Financial Group plunging 3.0%, Mizuho Financial Group tumbling 4.7% and Sumitomo Mitsui Financial Group slumping 6.9%.

Tech stocks were mixed. Advantest rose 0.9% and Tokyo Electron edged up 0.3%, while NEC lost 1.0%, Fanuc dropped 2.6%, Fujitsu gave away 1.8%, Kyocera slipped 0.1% and Matsushita Electrical Industrial declined 0.4%.

Shipping company Nippon Yusen tumbled 5.8%, Mitsui O.S.K. Lines plummeted 5.4% and Kawasaki Kisen slumped 8.7%.

Oil space was also mixed after oil prices continued to rise on Monday. Oil & gas miner Inpex Holdings advanced 0.6%, but Nippon Oil plunged 5.3% and Nippon Mining Holdings shed 1.4%.

Mitsui & Co plummeted 8.6% after the trading company said that its net profit tumbled 43.1% in the first quarter, hit by declines in capital gains from the sale of the Sakhalin-2 oil development project. Its rival Mitsubishi Corp dropped 5.4% and Itochu Corp shed 5.8%.

The South Korean market closed sharply lower, led by shipbuilders. The market started off weak and extended losses after shipbuilders reported cancellation of orders. The benchmark Korea Composite Stock Price Index or KOSPI closed down 30.72 points or 1.95% at 1,543.05.

On the economic front, the Bank of Korea said that South Korea's foreign exchange reserves declined for the fourth consecutive month in July. Foreign exchange reserves fell US$10.58 billion to US$247.5 billion by the end of July. In June, reserves totaled US$258.1 billion.

Daewoo Shipbuilding and Marine Engineering plunged 13.9% after the company said Friday that it had cancelled a 619 billion won order to build eight container ships for a European company. Hyundai Mipo Dockyard plummeted 10.4% after the company said that it had cancelled a 197 billion won order for four product carriers from a European firm.

Steelmakers fell on worries about demand for steel products. POSCO shed 3.4% and Hyundai Steel dropped 3.2%. In the airline sector, Korean Air Lines fell tumbled 6.3% and Asian Airlines declined 1.3% after U.S. crude rose to settle above $125 a barrel on Friday.

Tech exporters and machinery producers also finished in negative terrain. LG Display lost 3.0% and Hynix Semiconductor fell 2.6%. In the finance sector, brokerage house Samsung Securities shed 2.6%.

Bucking the trend, KT Corp jumped 3.8% and KTF rose 1.7% following reports that the fixed-line and broadband operator will submit a request for approval of its merger with mobile unit KTF.

Among automakers, Kia Motors 2.4% after the carmaker posted strong sales for July, but Hyundai Motor fell 2.4% after Hyundai announced a 3.6% fall in total sales and a 13.6% decline in U.S. sales in July.

The Chinese market closed sharply lower, reversing Friday's gains. The market started off weak and extended losses after China South Locomotive & Rolling Stock Corp. said that it might raise US$1.5 billion from dual Shanghai and Hong Kong initial public offerings. The benchmark Shanghai Composite index closed down 60.08 points or 2.145 at 2,741.74.

Steel makers led the market down, while shipping lines including China Shipping Container Lines dropped as demand in China for materials slowed before the Olympic Games.

Baoshan Iron & Steel plunged 4.9%, Xinjiang Bayi Iron & Steel tumbled 8.4%, Wuhan Iron & Steel plummeted 6.0% and Maanshan Iron & Steel fell 4.6%.

Among shippers, China Shipping Container Lines and China Shipping Development shed 3.0% each after the Baltic Dry Index, a measure of shipping costs for commodities, posted a 16th consecutive drop on August 1.

China Petroleum & Chemical or Sinopec lost 2.2% after the company reportedly offered to buy London-listed Imperial Energy.

Luthai Textile slumped 9.9% despite saying that its 2008 pretax profit will increase by about 21.1 million yuan after the government hiked tax rebates.

The Hong Kong market closed lower, snapping a three-day winning streak. The benchmark Hang Seng Index fell 347.68 points or 1.5% to close at 22,514.92.

The biggest oil refiner on the mainland, China Petroleum and Chemical Corp. or Sinopec, dropped 2.3% and oil producer CNOOC lost 1%.

Airline Cathay Pacific declined 2%, while the mainland's top carrier China Southern Air tumbled 4.8% and its smaller rival China Eastern Air fell 3.4%.

Index heavyweight HSBC Holdings closed unchanged ahead of its earnings announcement. Its unit Hang Seng Bank gave away 2%.

The Australian stock market closed lower, extending Friday's losses. The market traded briefly in positive territory in early trade, after a weak opening, but moved back into negative terrain soon as Lend Lease Corp announced a profit downgrade. While miners lost ground on lower metals prices, energy stocks gained on rising oil prices.

The benchmark S&P/ASX 200 index closed down 16.3 points or 0.3% at 4,887.7, after losing as much as 1.5% on Friday, and the broader All Ordinaries index lost 20.4 points or 0.4% to finish at 4,957.6.

On the economic front, Australian house prices fell for the first time in almost three years in the second quarter, according to government data released Monday. However, the drop was smaller than the fall that analysts had expected. Weighted average prices for established houses in Australia's eight largest cities dipped 0.3% in the quarter, compared to a 0.4% rise the previous quarter.

Meanwhile, a survey by Australia and New Zealand Banking Group showed that job advertisements around the country has fallen for the third successive month. Newspaper and Internet job ads fell by a seasonally adjusted 0.3% in July to 261,936 a week, but were up 5.5% on year. Jobs advertised in newspapers dived by 5.1% to 15,739 last month, while Internet ads were flat at 246,197.

Among banking stocks, Commonwealth Bank rose 0.5%, Westpac edged up 0.1% and ANZ Bank gained 1.7%, National Australia Bank lost 0.6%. St. George bank rose 0.4% and investment bank Macquarie Group closed little changed.

In the resources sector, index leader BHP Billiton fell 1.9% and Rio Tinto lost 2.9%. Gold miners were higher, with Newcrest Mining jumping 2.7% and Lihir Gold rising 2.3%. Among energy stocks, Woodside Petroleum gained 2.4%, Oil Search rose 1.6% and Santos advanced 2.3%.

In the retail sector, David Jones climbed 1.8%, Coles owner Wesfarmers added 1.3% and Woolworths edged up 0.4%. Takeover target Just Group surged 10.8% after the retailer said that it would recommend a hostile bid from Premier Investments if it receives acceptances from 50% or more of the ordinary shareholders and declares its offer as unconditional.

Property developer Lend Lease Corp. slumped 13.4% after the company said that it expects full-year statutory profit to fall 47% this year.

Asciano Group jumped 16.4%. Shares in the Group were placed in a trading halt pending an announcement about a potential takeover bid. The railroad operator said later that it had received an A$2.9 billion dollar takeover bid from a private equity consortium.

The New Zealand stock market closed higher, reversing a portion of the losses that it posted on Friday. The market started off lower, but moved into positive territory by mid morning. The benchmark NZX 50 Index closed up 16.06 points or 0.48% at 3,319.22 and the broader NZX All Capital Index rose 15.75 points or 0.47% at 3,358.44.

On the economic front, Statistics New Zealand said that the number of New Zealanders in full-time employment and the amount they earned both increased for the year ending in June 2008. Employment, as measured by full-time equivalent workers, increased 2.5% for the 12 months through the June 2008 quarter, but slowed from the 3.5% annualized rate at the end of the March 2008 quarter. Meanwhile, earnings rose by the highest amount on record. The Labor Cost Index from Statistics NZ showed an increase of 3.5% in overall salary and wage rates for the year through June.

Among top stocks, Telecom advanced 2.5% and Fletcher Building rose 0.3%, but Contact Energy dropped 0.1%.

In the retail space, Pumpkin Patch jumped 2.8%, Hallenstein Glasson edged up 0.4% and The Warehouse Group added 0.4%, while Michael Hill declined 1.3%. Briscoe Group closed unchanged after the company reported a 2.28% decline in second-quarter sales. The retailer also said that July sales were higher than anticipated.

Among other stocks, Sky City added 0.6%, Fisher & Paykel Appliances gained 2.7%, Fisher & Paykel Healthcare rose 2.1% and Methven jumped 3.2%. Nuplex climbed 1.8%, but Steel & Tube Holdings closed unchanged.

Energy scrip TrustPower moved up 0.5%, while Vector gained 1.3%. Dual-listed AMP surged 2.6% and ANZ Banking advanced 2.1%, but Westpac lost 1.5%.

Other Asian markets:

Taiwan's Taiex closed down 0.4% at 6,977; Singapore's STI closed down 1.0% at 2,876; Malaysia's KLCI closed down 0.9% at 1,148; Indonesia's Jakarta Composite index closed down 0.9% at 2,227; and India's Sensex closed down 0.5% at 14,577.

For comments and feedback: contact editorial@rttnews.com Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

More News:   Market Updates | Stock Alerts | All Trading News | Stock Index