Asian stocks sink; Sony drops on earnings revision

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(Agencies)
Updated: 2008-10-24 13:39

SINGAPORE – Asian stocks tumbled for a third day Friday on persistent worries that a global recession will eat into corporate profits. Shares of Sony plunged more than 12 percent after it slashed its earnings forecast for the fiscal year.

Pedestrians are reflected on an electric market board in Tokyo, Friday, Oct. 24, 2008. Japanese shares tumbled more than 7 percent by mid-afternoon trading Friday, hit by lingering fears over a global recession and the yen's surge to a 13-year high against the US dollar. [Agencies]

Sony's news "was yet another indicator that the global economy is really slowing," said Yutaka Miura, senior strategist at Shinko Securities in Tokyo. "The revision had a very negative impact on other tech-related stocks," such as Panasonic Corp.

"Investors remain worried over growing uncertainty about the state of the global economy," Miura said.

Asian markets seemed to shrug off a rebound in European markets and the Dow Jones industrial average on Thursday. Japan's Nikkei 225 stock average was down more than 7 percent to 7,847 in afternoon trading -- a 5 1/2-year low -- while Hong Kong's Hang Seng fell 4.6 percent to 13,125.

The dollar, meanwhile, fell to a 13-year low in Tokyo trading amid worries about a slowdown in the US economy. The dollar sank to 95.32 yen, the lowest since August 1995.

"The stronger yen is hurting Japanese exports, which is a big part of that country's economy," said Linus Yip, a strategist at First Shanghai Securities in Hong Kong.

South Korea's stock market fell sharply for a second day as figures showed the economy there was slowing. The Kospi was down nearly 9 percent to 9,550, falling below the 10,000 mark for the first time in more than three years.

Economic growth in South Korea, Asia's fourth-largest economy, was measured at 3.9 percent in third quarter, the slowest since the second quarter of 2005.

Markets in Thailand, Indonesia and the Philippines were also down sharply as investors bailed from emerging markets around the world to cut their exposure to risky assets and meet redemption needs at home.

On Thursday, key indices in Russia, Brazil and Mexico also fell.

"Funds are pouring out of emerging markets," Yip said. "A lot of money that flowed into the region during the last five years from the US and Europe is being cashed out. The global crisis has come to Asia."

Electronics giant Sony Corp. plummeted 12.4 percent to 2,005 yen after it cut its annual profit and sales forecasts. Sony said Thursday afternoon its net profit for the fiscal year through March 2009 would likely drop 59 percent from the previous year to 150 billion yen (US$1.5 billion). It blamed deteriorating sales of flat-panel TVs and other gadgets for the dismal projection.

Previously, Sony had expected to post 240 billion yen (US$2.4 billion) in profit for the fiscal year.

Overnight in New York, the Dow rose 2 percent to 8,691.25, while the Standard & Poor's 500 index rose and the Nasdaq fell.

Oil rose in Asian trade Friday, with light, sweet crude for December delivery up 55 cents to US$67.39.