Exporters Push Asia Lower

Ivaylo
22 Sep, 2001
New York City

Exporter shares such as Hyundai Motor of South Korea and camera maker Canon Inc. pressed Asian markets lower Friday, following a decline in U.S. markets supported by data suggesting the American economy may be slowing faster than anticipated. Exporters, whose earnings are sensitive to U.S. economic conditions, registered some of the heaviest losses in Tokyo. China Merchants Bank bucked the downtrend, however, and surged 25% on its first day of trading.

[R]7:30AM Asian markets fall tracking U.S. decline on weak economic data.[/R]
Asian markets were lower on Friday. The Nikkei 225 Average in Japan finished the day 1.26% lower at 15634.67. Stocks dropped to a six-week low as declines in U.S. markets and a stronger yen led to selling in exporter issues such as Canon, Bridgestone and Toyota. Canon shed 2.8%, Bridgestone lost 1.1% and Toyota sank 1.1%. Toshiba ended 2% lower and Honda slipped 1%. Sony finished 1.9% lower, suffering only limited impact from news that its videogame subsidiary will reduce the planned retail price for the next-generation PlayStation 3 console by 20%.

The Hang Seng Index in Hong Kong lost 0.11% to 17600.65. Shares ended lower after reaching a six-year high Thursday, with drops led by fashion retailer Esprit, which shed 2.9%. The Shanghai Composite Index ended 0.9% lower at 1725.36. China Minsheng Banking dropped 3.7% and Shanghai Pudong Development Bank slid 2.3%.

The Kospi Index in South Korea declined 1.35% to close at 1348.38. The market finished lower on worries over the U.S. economic slowdown and profit-taking, especially in transportation shares. Korean Air dropped 3.5% and Hyundai Merchant Marine shed 4.2% on profit-taking following recent gains spurred by lower oil prices.

Taiwan dropped 0.06% to 6885.60. Taiwan Semiconductor Manufacturing fell 1.3% and United Microelectronics declined 0.5%. Australia S&P/ASX 200 dropped 0.25% to finish at 4983.20. Weak bank shares pulled the Australian stock market lower for the fourth consecutive day. ANZ retreated 1.1% and Westpac fell 0.9%. But miners made ground after reaching multi-month lows this week, as BHP added 1% and Rio Tinto rose 2.9%.

[R]6:30AM European markets fall sharply on Philadelphia Fed data.[/R]
European markets declined on Friday. The FTSE 100 dropped 1% to 5,835.5, the Xetra Dax in Frankfurt fell 1.1% to 5,898.07 and the CAC-40 fell 1% to 5,154.11.

Corporate News

KPN agreed to sell its entire remaining 8% stake in the telecoms group. The government will sell about 87 million ordinary shares through an accelerated bookbuilding and a further 80 million ordinary shares will be repurchased by KPN, which will then cancel them. KPN fell 1.8%.

Advancers
Altana, the German pharmaceuticals and chemicals group rose 1.4%. On Thursday, Altana said it would sell its drugs business to Nycomed. Euronext, the operator of the Paris, Brussels, Amsterdam and Lisbon bourses added 1.7%. Metrovacesa added 4.3% after the two largest shareholders battling for control of largest property group in Spain failed to achieve a decisive position.

Decliners

Commerzbank fell 2.5% after Dresdner Kleinwort lowered its price target and Renault shares were down 0.8% in Paris after reports emerged overnight that talks between the French company and General Motors Corp. evaluating a possible alliance have stalled. Oil futures added 32 cents to stand at $61.91 a barrel, putting some pressure on airlines such as British Airways, trading down 1.3%., and auto stocks such as Volkswagen moving down 1.2%.

Oil and Gold

Oil prices advanced on Friday, bouncing back from a midweek drop sparked by figures showing a surge in U.S. distillate supplies. Light, sweet crude oil for November delivery gained 32 cents to $61.91 a barrel in electronic trading on the NYME. The gold bullion opened Friday at a bid price of $586.45 a troy ounce, up from $579.20 late Thursday.

Currencies

The euro rose against the U.S. dollar on Friday as traders favored the common currency after weak economic reports in the United States. In morning trading, the euro rose to $1.2818, up from $1.2766 late Thursday in New York. The British pound advanced to $1.9053 from $1.8990 late Thursday and the dollar slipped to 116.36 Japanese yen from 116.61 yen.

[R]5:00AM Gold futures rose but were bound in a narrow trading range.[/R]
December gold futures ended $2.10 higher at $588.30 a troy ounce on the NYME while December silver was up 10.5 cents at $11.245 an ounce. October platinum dipped 50 cents lower at $1,139.50 an ounce while December palladium finished up $2.65 at $309 an ounce. December copper rose 5.55 cents to settle at $3.4315 per pound.

November light sweet crude oil settled down 85 cents at $61.59 a barrel while October
heating oil advanced 3.1 cents to end at $1.6788 a gallon. Gasoline moved up 3.23 cents at $1.4994 a gallon. October natural gas sank 15 cents to close at $4.781 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures closed up 1.60 cents at $1.0355 a pound and March gained 1.65 cents to $1.0740 a pound. Futures on raw sugar in foreign ports for October contract slipped 0.56 cent to finish at 11.56 cents a pound and March lost 0.54 cent to end at 12.35 a pound.