Asian Markets Fall, Hong Kong Gains

Mukesh Buch
05 Dec, 2008
New York City

Stocks in Japan, Australia and India fell. Banks in Japan are likely to face declining revenues and falling earnings. Japan is likely to pass legislation next week to inject fresh capital in banks. Yanzhou Coal is expected to offer A$3 billion for Felix Resources.

[R]8:30AM New York – Asian stocks fell on the worries that worsening global economic slump will drive exports and domestic companies’ earnings lower.[/R]

Nikkei declined 7% for the week. Japan’s foreign currency reserves cross $1 trillion in November. Major shareholders back Panasonic’s sweetened offer for Sanyo Electric Co.

Stocks in Japan dropped marginally dragged by financial stocks after Goldman Sachs cut its 12-month price estimate on the country’s biggest banks by as much as 55%.

Paper companies and other domestic economy related stocks trimmed losses as crude oil prices slid 6.7% to $43.67 per barrel. Oil prices have dropped more than 70% since its mid-July peak at $147 a barrel.

In Tokyo trading Nikkei 225 index fell 0.1% or 6.73 to 7,917.51, a drop of 7% for the week, and the broader Topix Index shed 0.5% or 92.36 to 92.33, decline of 5.9% in the week. In the first section of the Tokyo Stock Exchange 8.4 billion shares worth 611 billion yen were traded and in the second section 133 million shares valued at 1.2 billion yen changed hands.

Hong Kong stocks rose driven by financial and realty stocks after the State Council reported recently that it will stimulate growth in key areas through the exchange rate and liquidity policy.

In Hong Kong trading Hang Seng Index rose 2.5% or 336.31 to 13,846.09, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, gained 2.8% or 201.35 to 7,428.54. In Shanghai trading CSI 300 Index soared 1.5% or 30.25 to 2,013.18.

Xinhua News Agency reported today that China and U.S. have pledged US$20 billion for trade finance in order to stimulate global commerce. The pronouncement was made at the end of the two-day China-U.S. strategic Economic Dialogue that was held in Beijing.

In Australia, construction industry shrinks for the ninth month in a row in November. Australia’s big four banks to provide A$2 billion loans for the car industry.

Australian market averages dropped as commodity stocks retreated on mounting worries that the increased government spending will not stop economy from weakening. In Sydney trading ASX 200 fell 1.2% or 42.5 to 3,489.90.

Of the ASX 200 index stocks, 67 rose, 116 declined, and 17 were unchanged. Felix Resources led advancers in the index shares with a rise of 36.6% after the company reported that it may receive takeover bid.

Yanzhou Coal Mining is expected to bid for Felix Resources for A$3 billion.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 6.73 or 0.08% to 7,917.51, Hang Seng index in Hong Kong increased 336.31 or 2.49% closed to 13,846.09 CSI 300 index in China higher 30.25 or 1.53% closed to 2,013.18. ASX 200 index in Australia decreased 42.50 or 1.20% to close 3,489.90. The KL Composite index in Malaysia lower 8.58 or 1.01% closed to 838.28.

The Kospi Index in South Korea increased 21.59 or 2.14% to close at 1,028.13. JSE Index in Indonesia increased 2.98 or 0.25% to 1,202.34. The Sensex index in India decreased 264.55 or 2.87% closed to 8,965.20. Markets of Thailand were closed today.