US Market down hard on Thursday...overseas markets reacting right now...too soon to tell what we'll see happen on Friday...the US Markets are very nervous right now and I continue to expect extreme volatility...fyi...
Asia Stocks Fall for Fifth Day on Growth Concerns; Nissan Drops
By Chua Kong Ho
Sept. 5 (Bloomberg) -- Asian stocks fell for a fifth day, set for the biggest weekly decline in a year, after rising U.S. jobless claims deepened concern economic growth is stalling and sparked a global sell-off.
Nissan Motor Co. fell 2.9 percent after U.S. unemployment rolls rose to the highest in almost five years. Rio Tinto Group dropped 1.9 percent after raw materials prices declined, adding to the biggest weekly sell-off for Asian commodity stocks in at least 13 years. Mizuho Financial Group Inc. tumbled 5.9 percent after Bill Gross, manager of the world's biggest bond fund, warned of a ``financial tsunami'' and Goldman, Sachs & Co. told investors to sell Merrill Lynch & Co. as writedowns rise.
``Sentiment is terrible,'' said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors, which manages about $108 billion. ``You've got this ongoing correction in commodity prices, issues regarding financials, and concerns about profit downgrades in economically-sensitive companies.''
The MSCI Asia Pacific Index lost 2 percent to 116.89 as of 2:30 p.m. in Tokyo. The measure is headed for a 6.7 percent drop this week and the lowest since July 19, 2006. Only one of the benchmark's 10 industry groups rose, with about seven stocks declining for each that advanced.
The region's index has tumbled 26 percent in 2008, almost twice the drop in the Standard & Poor's 500 Index, as a global slowdown cuts demand for the region's exports and financial companies post losses and writedowns stemming from the credit crisis. More than $15 trillion has been wiped off global stock markets since the October 2007 peak.
BHP Billiton Ltd. and Rio led MSCI's index of 114 Asian materials stocks to a 12 percent tumble this week, headed for its biggest weekly loss since the measure started in January 1995.
Sony, Sumco
S&P futures dropped 0.4 percent today.
``The outlook is very bearish,'' said Tomokatsu Mori, who helps oversee $9.3 billion in Tokyo at Fukoku Capital Management Inc. ``Credit risks are increasing.''
Japan's Nikkei 225 Stock Average dropped 2.7 percent to 12,213.64. Sony Corp. fell after announcing a worldwide computer recall. Sumco Corp. tumbled after second-quarter profit decreased.
Hong Kong's Hang Seng Index fell below 20,000 for the first time since April as Sun Hung Kai Properties Ltd. declined following a cut to the city's growth forecast by Goldman Sachs. All markets open in Asia declined.
The S&P 500 yesterday dropped 3 percent in the longest stretch of losses since January after the number of people staying on jobless rolls rose the highest since November 2003.
European central bank President Jean-Claude Trichet said yesterday the economy is seeing an ``episode of weak activity.''
Nissan, Canon
Nissan, which generates more than half its profit in North America, slumped 2.9 percent to 806 yen. Toyota Motor Corp., which gets more than a third of its sales in the region, dropped 1.9 percent to 4,780 yen. Mazda Motor Corp. tumbled 6 percent to 532 yen, the most in a month.
Canon Inc., which gets almost 80 of its sales outside of Japan, declined 2.5 percent to 4,650 yen. Japanese exporters also fell as the yen gained against the euro to the highest in more than a year and appreciated versus the dollar to the strongest since July 17. A stronger local currency reduces Japanese companies' repatriated overseas sales.
Capital spending in Japan excluding software fell 7.6 percent in the three months ended June 30, a fifth-straight quarterly decline, data today showed. Earlier this week, reports showed Chinese manufacturing contracted for a second month in August, and Australia's economic expansion slowed to the weakest pace in more than three years as consumers cut spending.
`More Downturns'
``At this stage of the game, we expect more bad news, more downturns, so there's no big rush into the market,'' said Mark Mobius, executive chairman of Templeton Asset Management Ltd., which oversees about $40 billion in emerging-market equities, in a Bloomberg Television interview. ``It's good to be conservative and to conserve some cash but take advantage of these opportunities'' when share prices fall.
Rio Tinto, the world's No. 2 mining company, slid 1.9 percent, while BHP, the biggest, lost 1.3 percent to A$36.64, as a measure of six metals traded on the London Metal Exchange dropped 1.1 percent. Sumitomo Metal Mining Co., Japan's largest gold producer, fell 3.2 percent to 1,155 yen, after gold declined for a fourth-straight day.
Santos Ltd., Australia's third-largest oil and gas producer, retreated 3.1 percent as oil traded at $107.77 a barrel, extending a 1.3 percent decline yesterday. Prices are down 27 percent since the record $147.27 reached July 11.
`Financial Tsunami'
Mizuho, Japan's second-biggest bank by assets, dropped 5.9 percent to 414,000 yen, while Mitsubishi UFJ Financial Group Inc. slid 4.7 percent to 756 yen. Commonwealth Bank of Australia, the country's biggest lender, fell 3.5 percent to A$41.39.
Gross, co-chief investment officer of Pacific Investment Management Co., yesterday said the U.S. government needs to start using more of its money to support markets to stem a burgeoning ``financial tsunami.''
William Tanona, an analyst at Goldman in New York, placed Merrill on the brokerage's ``conviction sell'' list, saying the company could post a $5.75 per share loss this quarter, versus a previous estimate for a $1 profit.
Sony fell 4.4 percent to 3,870 yen, the most since July 25, after the world's second-largest maker of consumer electronics recalled about 440,000 VAIO notebook computers worldwide, citing a risk of overheating that could result in burns.
To contact the reporter for this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net;
Last Updated: September 5, 2008 02:00 EDT |
