Global slowdown concerns investors in AsiaSeptember 1st, 2008 - 7:26 pm ICT by IANS
Tokyo, Sep 1 (DPA) Asian stocks slumped Monday on concerns that a global economic slowdown would cut into corporate profits and on declines on Wall Street ahead of the weekend.South Korea’s Kospi index saw the region’s biggest decline at 4.06 percent, while stock indices in mainland China and Taiwan dropped more than three percent.
A stronger yen, which reduces exporters’ overseas earnings, also turned investors in Tokyo bearish, as the benchmark Nikkei 225 Stock Average was down 1.83 percent at 12,834.18, while the broader Topix index of all first-section issues also fell 1.96 percent to 1,230.64.
A slowdown in US consumer spending in July raised fears of lower demand for products made in Japan, whose largest export market is the US, as well as in the other production powerhouses of Asia.
In China, stocks tracked losses in other Asian markets, but domestic events also played a role.
Analysts blamed the mainland slump on the lack of expected government measures to boost China’s stock markets, concerns about the lack of profitability of some listed companies and the impact of a new earthquake in the southwestern province of Sichuan over the weekend, the Shanghai Daily newspaper said.
The key Shanghai Composite Index, which tracks shares traded in local and foreign currencies, fell 3.01 percent to 2,325.14.
State-run steel, aluminum, auto and aviation firms were among the biggest losers in Shanghai.
With Monday’s fall, the Shanghai index has lost more than 55 percent of its value this year, but analysts had forecast a slump and warned for months that Chinese shares were heavily inflated.
The smaller Shenzhen Component Index also plunged 3.29 percent to 673.51, while the CSI 300 Index, which tracks yuan-denominated A shares listed on the mainland’s two exchanges, dived 3.45 percent to 2,309.17.
Besides concerns about the US economy, heavy selling in the technology sector - triggered by worse-than-expected quarterly profits released by Taiwan’s top electronics maker, Hon Hai Precision Industry Co - also sent stocks in Taipei down 3.3 percent, dealers said.
The weighted price index of Taiwan Stock Exchange plummeted 3.3 percent to 6,813.09.
In South Korea, the Kospi fell to 1,414.43 as the won dropped to a four-year low against the US dollar. A weaker won raises the cost of dollar-denominated corporate debts and fuel expenses.
Both the lower won and higher fuel prices dealt Korean Air Lines Co the biggest drop in its stock in six years.
Other major indices around the region also fell: Hong Kong’s Hang Seng by 1.67 percent, Singapore’s Straits Times Index by 0.95 percent and Australia’s S&P/ASX 200 Index by 0.34 percent.
The Stock Exchange of Thailand Index fell 1.35 percent in a country that is seeing anti-government demonstrations, while India’s two major stock indices slumped by about one percent by early afternoon trading.
Most other indices also dropped. Malaysia’s and Vietnam’s were closed for holidays, and the US stock market is also to be closed Monday.