Asian Markets Sink Early on SARS, War Concerns
Sun Mar 30,11:57 PM ET
story.news.yahoo.com
Asian-Pacific stocks stumbled early Monday, as a deadly pneumonia
sweeping the region brought parts of Hong Kong to standstill and worries
about the economic fallout from the war in Iraq (news - web sites) continued
to escalate, after a weekend in which little seemed to occur to bring its end
closer.
Raising new worries about the economic impact
of severe acute respiratory syndrome, or SARS,
the U.S. told Americans planning nonessential
travel to mainland China, Hong Kong, Singapore
and Hanoi, to "postpone their trips until further
notice."
Several European and Asian countries
have issued similar warnings. At the same
time, Hong Kong health officials reported that
105 more people had fallen ill over the weekend
-- pushing the number of infections world-wide
to more than 1,600.
Regional investors also were reflecting on a
poor performance last week by stocks traded in
U.S. For the week, the Dow Jones Industrial
Average slumped 4.4%, while the Nasdaq
Composite Index was down 3.7%.
In Tokyo, the benchmark Nikkei Stock Average
sat 2.5% lower at 8074.10 at the midday break,
after a 1.1% loss Friday. Some of the action
was related to the fact that many investors were
squaring their positions on last day of the fiscal year.
Meanwhile, shares of Japanese banks and life insurers -- and indeed the
broader market -- also faced pressure from a Moody's Investors Service
(News - Websites) report saying that the two sectors continue to have a
large amount of interdependence, making a chain reaction of losses
possible in the future.
In Hong Kong, property developers were hurt by the impact of SARS on an
already sluggish property market, after potential home buyers stayed away
from the city during the weekend. The Hang Seng Index fell 2.6%.
South Korea (news - web sites)'s stocks also headed lower, with profit
taking after recent gains, Wall Street's losses and negative sentiment over
the war leading to a 2.8% loss by the market's main index in early trading.
"The war is still damaging economic sentiment. The prospect of a more
costly war leaves investors reluctant to step into the market," said Park
Sung-Min, a fund manager at Seoul Investment Trust & Management.
Blue chip Samsung Electronics sunk about 4%, weighed by the Nasdaq's
fall Friday as U.S. blue chips rose. Other local heavyweights chips,
including Kookmin Bank and SK Telecom were also struggling. Korea's
Hyundai Motor tumbled on worries about the effect of a longer-than-expected
war on consumer sentiment. "The longer the Iraq war lasts, the more
severely auto demand will be hurt," said Lee Dong-Won, an analyst at LG
Investment & Securities.
Taiwan shares also moved sharply lower, as the benchmark index of the
Taiwan Stock Exchange dropped nearly 3%. Shares of Taiwan's two major
airlines -- China Airlines and EVA Airways -- were being hit hard by
concerns over the effect SARS will have on their business by keeping
Taiwanese from traveling to China and to Hong Kong.
Singapore's Straits Times Index also sunk about 3%, with Sinapore
Airlines's losses slightly outpacing the broader index on the similar
concerns about the effects of the deadly illness on air travel. The nation,
which thought it had stopped the disease's spread through a massive
quarantine of almost 1,000 people last week, was jolted with the
announcement that a 29-year-old woman who flew in from Beijing on
Wednesday was infected.
Meanwhile, major indexes in Australia, Indonesia, Malaysia, the Philippines
and Thailand slipped slightly. Shares in New Zealand were headed for a up
close in late trading.
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