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Asian stock markets slump amid financial fears
(Agencies)
Updated: 2009-02-17 19:05 HONG KONG -- Asian stock markets fell sharply Tuesday, with benchmarks in Hong Kong and South Korea down about 4 percent, as renewed financial fears sent banks across the region tumbling.
Every major market retreated with the previous day's news that Japan's recession deepened amid the global economic downturn still weighing on investors. Crude oil prices fell below $37 a barrel, though the dollar strengthened against the yen. Banks and insurers were in the spotlight amid concerns there was more pain ahead for the global financial industry. In Britain, speculation mounted overnight that Lloyds Banking Group might be nationalized after the firm Friday reported larger-than-expected losses at recently acquired Halifax-Bank of Scotland. Across Japan and other Asian countries, the cost of protecting against defaults on bank debt rose, analysts said. In South Korea, Woori Bank shares came under pressure after the lender said it would seek government funding of about $1.4 billion in an effort to boost capital and loans amid the downturn. Mid-sized Hong Kong lender Bank of East Asia, which was hit by a run on deposits in September, reported a bigger-than-expected loss for the second half. "The news flow just hasn't stopped being negative about financials," said John Mar, co-head of sales trading at Daiwa Securities SMBC Co. in Hong Kong. "It doesn't seem like we've hit bottom yet." Japan's Nikkei 225 stock average sank 1.4 percent to 7,645.51, as investors digested news Japan's finance chief was stepping down because of health problems after facing allegations he was drunk at last weekend's Group of Seven finance ministers' meeting in Rome. Finance Minister Shoichi Nakagawa, who blamed his grogginess on a combination of cold medicine and jet lag, said he will stay on until parliament approves a supplementary budget, probably in April. Elsewhere, Hong Kong's Hang Seng dropped 3.8 percent to 12,945.40, and South Korea's Kospi plummeted 4.1 percent to 1,127.19. Markets in Australia, India and Singapore also declined. In Chinese mainland, where shares have surged in recent weeks on hopes its economy can sustain strong growth, the Shanghai benchmark lost 2.9 percent to 2,319.44. Among financials, leading Japanese bank Mitsubishi UFJ Financial Group Inc. sank 4 percent. In Hong Kong, China Construction Bank shed 5.7 percent, while heavyweight lender HSBC was down 2.5 percent. Woori Finance Holdings, parent of Woori Bank, plunged 6.5 percent. The firm's announcement to tap state funds added to investor anxiety stirred last week when it decided against repaying some of its debt early as is normally done. Wall Street, closed Monday for a public holiday, was to reopen Tuesday. US futures traded lower with Dow futures down 121 points, or 1.6 percent, at 7,658 and S&P500 futures down 15.5, or 1.9 percent, at 804.60. Oil prices dipped, with light, sweet crude for March delivery falling $1.01 to $36.50 in Asian trade after settling at $37.51 on Friday. The dollar advanced to 92.12 yen compared to 91.68 yen. The euro traded down at $1.2631 from $1.2539. |
