Asian markets close sharply lower on recession worries

(RTTNews) - The stock markets across the Asia-Pacific region extended their losses Thursday amid fresh worries about the state of the U.S. and Chinese economies, and poor corporate news out of the United States. Comments from Treasury Secretary Paulson that the U.S. government was no longer planning to buy troubled mortgage-backed assets with the rescue money also dented investor sentiment. Shanghai Composite Index bucked the regional trend, jumping 3.7% as the Chinese government's $586 billion economic stimulus package announced Sunday continued to underpin sentiment. Oil prices continued their decline after the U.S. Energy Department said Wednesday that it expects U.S. consumption of petroleum to drop next year more severely than any time since 1980.

At 3:53 a.m. ET, oil was quoted at $55.58 a barrel, down $0.58, after the contract for December delivery plunged 5% overnight to hit a 22-month low.

Wall Street plunged for the third straight session on Wednesday amid disappointing corporate news, falling commodity prices and comments from Treasury Secretary Paulson that the government was no longer planning to buy troubled mortgage-backed assets with the rescue money. The Dow closed down 411.3 points or 4.7% at 8,282.7, the Nasdaq shed 81.7 points or 5.2% to 1,499.2 and the S&P 500 plunged 46.7 points or 5.2% to 852.3.

In currency trading, the U.S. dollar weakened to the mid 95-yen levels in late Tokyo deals, while it strengthened against the South Korean currency to finish at 1,391.5 won. The Australian dollar and the kiwi also fell against the greenback. The Aussie finished at a two-week low of US$0.6417-0.6422, while the New Zealand dollar ended the domestic session at US$0.5615.

The Japanese stock market tumbled to a two-week low, extending its losses for the third straight trading session. The benchmark Nikkei 225 Stock Average closed down 456.9 points or 5.3% at 8,238.6, recovering from the day's low of 8,148.3. The broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 37.7 points or 4.3% to end at 837.5. Both the key indexes ended at their lowest levels since October 29. Stocks fell across the board led by mining, insurance, and iron and steel issues.

On the economic front, the Bank of Japan said Thursday that the price of corporate goods in Japan rose 4.8% on year in October, posting an index score of 109.8. That came in below analyst expectations that called for a 5.5% annual increase, following the 6.8% jump on year in September.

The Japanese Ministry of Finance reported that foreign residents remained net sellers of Japan stocks, bonds and notes for the fourth straight week last week. Foreign residents sold a net 198.0 billion yen in Japan-based stocks for the week of November 2 through 8. Foreign residents were also sellers of a net 573.8 billion yen in Japan bonds and notes for the week.

Meanwhile, Japan's industrial production growth for September was revised down to 1.1% month-on-month from 1.2%, a final report from the Ministry of Economy, Trade and Industry showed Thursday. On annual basis, production rose 0.2%.

In other economic news, sales of condominiums in Tokyo fell by 26% year-over-year in October, after annual sales fell 53.3% in September.

Nippon Steel slumped 6.1%, T&D Holding sank 7.8%, and Inpex Holdings tumbled 10.6%. Consumer electronics makers fell as U.S. chain Best Buy slashed its forecast, Circuit City Stores filed for bankruptcy protection and U.S. tech bellwether Intel issued profit warning. Sony lost 8.7%, Canon shed 6.3%, and Panasonic Corp dropped 7.4%.

Financials closed lower on renewed credit worries. Mizuho Financial Group plummeted 6.6% following media reports that the group plans to boost its capital base by the end of the year. Mitsubishi UFJ Financial Group lost 3.7% and Sumitomo Mitsui Financial Group tumbled 8.0%.

Other notable decliners were Asahi Glass and Nippon Sheet Glass after the European Union on Wednesday imposed its highest ever penalty on four companies including Asahi Glass and Pilkington Group of Britain, a subsidiary of Nippon Sheet Glass, for forming an illegal cartel for selling sheet glass for automobiles. Asahi Glass lost 5.0% and Nippon Sheet Glass shed sank 9.0%.

Bucking the trend, construction firms Shimizu, Obayashi and Kajima closed higher. Shimizu jumped 13.4%, Obayashi gained 10.0%, and Kajima advanced 8.0%.

The South Korean stock market closed sharply lower, extending its losses for the third consecutive trading session. The benchmark Korea Composite Stock Price Index closed down 35.4 points or 3.2% at 1,088.4 after falling as low as 1,040.0 in afternoon trading.

On the economic front, the Bank of Korea said that South Korea's terms of trade deteriorated to the lowest level in over 20 years in the third quarter on soaring oil and raw material costs. The country's net terms-of-trade index for goods fell 13.8% on year to 78 in the July-September period. The index declined to the lowest level since 1988, when the central bank began to compile related data.

Among major losers, top steelmaker POSCO plunged 6.8% and Woori Finance Holdings plummeted 15.0%. Market heavyweight Samsung Electronics dropped 1.4% and panel giant LG Display tumbled 11.12% after it was fined $400 million by the U.S. government for colluding with rivals on prices. Leading builder Daewoo Engineering & Construction nosedived 11.0%.

The Chinese stock market closed sharply higher, extending Wednesday's moderate gains. The market started off weak, but recouped early losses and moved into positive territory by late morning, despite weakness in the stock markets in the Asia-Pacific region as more signs of a sharp downturn in the U.S. economy emerged. The benchmark Shanghai Composite Index closed up 68.5 points or 3.7% at 1,927.6.

On the economic front, industrial production in China rose 8.2% on year in October, the National Bureau of Statistics said Thursday, slowing from the 11.4%t annual expansion in September. The data came in well below analysts' expectation for an increase of between 10.1% and 10.9% on year. For the period of January through October, industrial production climbed 14.2% on year.

Energy stocks led the gainers, with Shanxi Xishan Coal and Electricity Power surging by the daily limit of 10% and Pingdingshan Tianan Coal Mining jumping 10.3%.

In the financial sector, CITIC Securities advanced 3.0%, Changjiang Securities gained 4.8%, and Guoyuan Securities advanced 4.7%. China Life Insurance added 2.8% and its smaller rival Ping An Insurance rose 1.7%.

Property developer China Vanke and Gemdale climbed 3.9% each, while COFCO Property rose 3.8%.

Market heavy weight PetroChina jumped 2.8% and oil refiner Sinopec surged up 4.4%.

The Hong Kong stock market plunged on Thursday, with the benchmark Hang Seng Index closed down 717.7 points or 5.2% at 13,221.4. Hang Seng China Enterprise Index, which tracks the overall performance of 43 Chinese mainland state-owned enterprises on the Hong Kong Stock Exchange, dropped 339 points or 4.8% to 6,795.6.

Among market heavyweights, HSBC Holdings tumbled 6.3%, China Mobile slid 4.6%, and Hong Kong Exchanges and Clearing plummeted 7.9% after it announced a 43% decline in net profit for the third quarter.

Coal producer China Shenhua Energy lost 7.0%, while copper maker Jiangxi Copper plunged 7.9%. Offshore oil producer CNOOC shed 5.3%, Sinopec fell 4.1% and PetroChina gave away 6.4%.

Among banks, China Construction Bank declined 4.7%, Industrial & Commercial Bank of China lost 3.9%, Bank of China slid 4.6%, Bank of Communications dipped 5.4% and China Merchants Bank dropped 4.4%.

Top insurer China Life Insurance declined 2.8% and Ping An Insurance fell 3.2%.

The Australian stock market plunged nearly 6% to its weakest close in a little over four years on Thursday, extending its losses for the third straight trading session. Heavy falls on Wall Street overnight, after the U.S. government announced that it would not buy banks' soured mortgage assets, dented investor sentiment. Additionally, falling commodities prices weighed down resources stocks. The benchmark S&P/ASX 200 index fell 230 points or 5.9% to its lowest close since October 25, 2004 of 3,697.3. The broader All Ordinaries index fell 211.2 points or 5.4% to 3,672.4. On the Sydney Futures Exchange, the December share price index futures contract was down 240 points at 3,746.

On the economic front, the Australian Bureau of Statistics reported that average overall weekly wage in Australia increased a seasonally adjusted 4.7% on year in August. For the quarter ending August, the average overall weekly wage rose 1.6% on year.

Meanwhile, the Melbourne Institute survey of consumer inflationary expectations found that the expected median inflation rate was at 3.3% in November compared to 4.4 % in the previous month. The proportion of respondents expecting prices to rise in the next 12 months decreased by 13.1 percentage points to 61.7% in November, its the lowest reading since March 2001.

Among banks, Commonwealth Bank plunged 6.0% after the bank said that provisioning for doubtful corporate loan would increase because of economic slowdown, National Australia Bank shed 2.7%, Westpac plummeted 11.2%, and ANZ tumbled 8.8%. St George sank 9.4% after shareholders approved the A$16 billion merger proposal by Westpac.

In the resources sector, index leader BHP Billiton slumped 11.7% and Rio Tinto sank 8.2%. Energy sector was weak, with oil and gas producer Woodside Petroleum shedding 7.7% on a fall in oil prices, even though it said that it would achieve record production, revenue and profit in calendar 2008, Oil Search falling 0.4% and Santos dropping 7.2%. Among gold stocks, Newcrest Mining fell 5.0%, Lihir Gold tumbled 10.8% and Newmont dropped 9.6%.

Newspaper publisher Fairfax Media fell 6.1% after the company said that it expected tough trading conditions for some time.

In the retail space, Wesfarmers tumbled 6.2% after the retailer reassured shareholders that there were improvements at its Coles supermarket arm and that concerns about the group's balance sheet were unfounded. Among other retailers, Harvey Norman shares sank 10.1%, Woolworths lost 4.4%, and David Jones declined 1.9%.

The New Zealand stock market ended in negative territory for the third day. Wall Street's plunge overnight and weakness among markets in the Asia-Pacific region dented investor sentiment. The benchmark NZX 50 index closed down 42.6 points or 1.5% at 2,729.6 and the broader NZX All Capital index shed 37.8 points or 1.4% to end at 2,765.4.

On the economic front, retail sales in New Zealand were lower in the three months to September, the third straight quarterly decline. Statistics New Zealand reported that the seasonally adjusted value of sales was down 0.1% on quarter. Sales volumes fell 0.9%. Core retail sales, which exclude auto-related transactions, declined 0.2% on quarter, while core sales value rose 0.4%.

Meanwhile, manufacturing activity in New Zealand contracted in October for the sixth month in a row, reaching a record low, according to survey reports released Thursday. The Bank of New Zealand and Business NZ Performance of Manufacturing Index registered a reading of 43.5 in October, a decrease of 3.2 points from the downwardly revised reading of 46.7 in September.

Among market leaders, Telecom rose 0.8%, Contact Energy fell 0.7% and Fletcher Building dropped 2.9%.

Fisher & Paykel Appliances plunged 3.7% after the company reported a loss in the six months to September 30 and cut its dividend. The company said the outlook was too uncertain to forecast a full year figure.

Ebos slipped 0.1%, Freightways shed 2.0%, New Zealand Oil & Gas tumbled 7.1%, Nuplex slid 3.7%, Rakon plunged 6.1%, Ryman Healthcare sank 4.8%, and Sky City edged down 0.3%.

Among risers, Air New Zealand gained 2.3%, Goodman Property Trust advanced 1.0%, and Kiwi Income Property Trust climbed 2.0%.

Other Asian markets:

Taiwan's Taiex closed down 3.9% at 4,437; Singapore's STI closed down 1.6% at 1,755; Indonesia's Jakarta Composite Index closed down 5.0% at 1,259; Malaysia's KLCI closed down 9.8 points at 880. The financial markets in India remained closed on account of a public holiday.

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