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Asian Markets End Lower on Credit Fears

CNBC.com
Thursday, 13 Dec 2007 | 5:25 AM ET

Skepticism about plans by major central banks to tackle tight credit conditions kept Asian stocks subdued Thursday, with all of the benchmark indexes marking a loss for the day.

The U.S. Federal Reserve said it would launch a temporary short-term lending facility for banks to secure funds, while the European Central Bank and counterparts in Canada, Britain and Switzerland announced similar moves.

The Bank of Japan added that it would ensure stable money markets by conducting appropriate operations such as supplying year-end funds, as the world's major central banks acted together to ease pressure in money markets. Australia also gave its support to the joint action.

Financial stocks fell across the region, further hit by news that three of the major U.S. banks including Bank of America had warned of fourth-quarter write-downs and loan losses. Japan's Mitsubishi UFJ, South Korea's Shinhan Financial Group and Australia's Macquarie Group were all lower. Citigroup's Tokyo stocks dropped 5 percent. But investors bought energy stocks on the back of the jump in oil prices overnight. Japan's Inpex Holdings and Australia's
Woodside Petroleum both climbed.

The Nikkei 225 Average shed almost 2.5 percent as Mitsubishi UFJ Financial suffered its biggest drop in more than three years amid rekindled concerns about subprime mortgage problems after Bank of America and Wachovia warned of fourth-quarter write-downs and losses.

South korea's KOSPI closed 0.6 percent lower, led by steel maker POSCO and broadband operator KT Corp as local institutions saw
recent gains in blue chips as excessive amid uncertainties about the 2008 economy.

Australian shares slipped 0.3 percent to a one-week closing low as investors sold companies geared to U.S. growth on concerns about the outlook for the world's biggest economy. Qantas Airways and travel firm Flight Centre raced to records after they boosted their earnings forecasts on the back strong consumer spending, but mining and freight services company Bradken tumbled after its forecast fell well short of market expectations.

Hong Kong stocks dropped 2.7 percent as plans by the U.S. Fed and other major central banks failed to ease credit market strains, pressuring financial shares.

Singapore's Straits Times Index closed 2 percent lower. Shares of China New Town fell more than 8 percent after the Chinese property firm posted a loss for its third quarter.

Chinese stocks finished 2.7 percent down as bank and real estate shares continued a slide that began this week because of tightening monetary policy. Bank of China and major property developer Vanke were both sharply lower.