Fear in Asian Markets, Japan Down 4%

123jump.com Staff
21 Jan, 2008
New York City

Asian markets fell sharply as worries mounted on the U.S. economic recession and lack of clear direction in trading. President Bush plan to stimulate the economy with $150 billion fiscal package fell flat on invstors. India fell at the worst 11%, Hong closed down 5.5%, and Japan declined 4%. European markets are down more than 4% in the afternoon trading led by 5.5% fall in Germany, Spain and Norway.

[R]5:00AM New York, 7:00PM Tokyo - Asian markets close sharply lower as fears of the U.S. led global slowdown made rounds.[/R]

Stocks fell in Japan weighed down by weak domestic data and lingering concerns of the sub-prime mortgage crisis. Asian markets in the region fell sharply after investors shrugged off President Bush economic stimulus package as too little and too late.

Australian market fell for the eleventh trading session in a row, Hong Kong closed down 5.5%, and India recovered from a plunge of 11% before closing down 7.4%. Fear of global economic slowdown and lack of clear direction on trading desks around the region was visible.

In Tokyo Nikkei 225 Index closed lower 535.35 or 3.86% to 13,325.94, in Hong Kong Hang Seng index decreased 1383.01 or 5.49% closed to 23,818.86, in Australia ASX 200 index declined 166.90 or 2.90% to close 5,580.40.

In South Korea Kospi Index decreased 51.16 or 2.95% to close at 1,683.56, in Thailand SET index closed lower 23.14 or 2.93% to 766.53, and Indonesia JSE Index edged decreased 125.25 or 4.80% to 2,485.88. Sensex index in India decreased 1408.40 or 7.41% to 17,605.35.

In Tokyo trading Nikkei 225 fell 3.86% or 535.35 to 13,325.94, while the broader Topix Index slumped 3.6% or 47.76 to 1,293.74, below 1,300 for the first time since September 2005.

In the first section of the Tokyo Stock Exchange 21 billion shares worth 2.5 trillion yen were traded and in the second section 762 million shares worth 10.1 billion yen changed hands.

Of the Nikkei 225 stocks 5 gained, 219 declined, and one was unchanged. Shinsei Bank Limited led advancers with a rise of 2.27% on reports a U.S. buyout firm will acquire 23% of the company for 220 billion yen.

The Ministry of Finance’s regional economic chiefs today cut the evaluation of five of the eleven regional economies in the quarterly economic report. However, the finance ministry said Japan’s economy is on the whole expanding at a moderate pace, and left its overall economic assessment unchanged for the 16th quarter.

The Real Estate Economic Research Institute said in a report published today that the supply of condominiums in Tokyo and the surrounding areas plunged 18% from a year ago, the most since 1991 as demand fell on rising sales prices on higher materials costs and land costs.

Furthermore condominium supply in Tokyo fell for the second consecutive year by 18.1% to 61,021.

The Australian news online reported today that Citigroup will proceed with a 32% stock offer for a 32% stake in Nikko Citigroup at a ratio of 0.6 to 1 on a 1,700 yen share valuation of the brokerage. The revised offer values Nikko acquisition at 1.58 trillion yen.


U.S. President Bush’s plan of a stimulus package to provide and much as $150 billion failed to excite the markets on January 18. The U.S. Administration is considering offering $800 tax rebate for individuals and $1,600 for households. However the tax rebates in the past have not been effective in lifting economic growth. Most of the payment ends up in paying the credit debt and not on spending for new goods and services.

Of the Nikkei 225 index shares Shinsei Bank Limited led advancing stocks with a rise of 2.27% followed by rises of 1.20% in Chugai Pharmaceutical Company, of 0.62% in Kao Corp, of 0.43% in Tokyu Corp, and of 0.32% in Japan Tobacco.

Mitsui Engineering & Shipbuilding led decliners in the Nikkei 225 stocks with a fall of 8.99% followed by losses of 8.85% in Toho Zinc Company Limited, of 8.61% in Dentsu Incorporated, of 8.02% in Pioneer Corp, and of 7.89% in Hitachi Zosen.

Shipbuilders fell on concern the U.S. and Japan will enter into a recession, leading to a decline in demand for raw materials.

Other shipbuilders fell as well. Mitsui OSK Lines plummeted 5.67%, Kawasaki Heavy Industries shed 5.17% and Kawasaki Kisen fell 5.69%.

Dentsu plunged after Merril Lynch & Company cut its rating of the stock from “buy” to “neutral” saying the advertising market will be week between April and June.

Merrill also cut its 12-month price estimate on the stock from 267,000 yen to 370,000 yen.

Financial stocks slipped after Bank of America downgraded MBIA Incorporated and Ambac Financial Group from “overweight” to “neutral” on concern of rising potential losses. Mitsubishi UFJ Financial Group shed 6.15%, Mizuho Financial Group dropped 4.92% and Resona Holdings lost 6.82%.

Fujitsu said in a statement today it will spin off its semiconductor business by the end of March 2008 and spend 10 billion yen to relocate its production facility. The company’s semiconductor business is forecasted to generate less than 5 billion yen in profit this fiscal year.