Asian Markets Finish Lower, Hong Kong Hit Hard
Asian markets reversed gains, finishing in negative territory Tuesday with both Japan and South Koreaclosing down 1 percent and Hong Kong losing 2.4 percent . The Nikkei sank below the key 14,000 support level while the KOSPI finished at five-month lows.
Concerns that the banks' weak earnings could prompt more U.S. Federal Reserve interest rate cuts kept the U.S. dollar under pressure, near seven-week lows against the yen and the euro .
Investors are keenly awaiting earnings announcements from Citigrouplater in the session, followed by Merrill Lynch and JPMorgan Chase later in the week, for clues on the fallout from the subprime mortgage meltdown and the possible risk of a U.S. recession.
Japan's Nikkei 225 Average fell 1 percent to finish below the 14,000 level for the first time since November 2005, with exporters such as Honda Motor and Daikin Industries after the yen gained against the
South Korea's KOSPI fell 1.1 percent to a fresh five-month closing low, as worries of big writedowns mounted ahead of
earnings from U.S. banks, but strong quarterly profitsboosted Samsung Electronics and LG.Philips LCD. Samsung reported a narrower-than-expected 7 percent fall in quarterly profit as strong earnings from flat screens and mobile phones offset another poor performance by its chip unit.
Australian shares extended their losing streak to seven sessions, with sentiment hit by a renewed plunge in Centro Properties Group and as financial stocks eased on ongoing U.S. economic worries. Centro tumbled as much as 48 percent after an update to the market on its refinancing problems failed to instill any confidence in investors. Around 16 percent of Centro's issued capital changed hands, making it the most active stock on the S&P/ASX 200 Index. It recovered somewhat to close down 30 percent at A$0.60.
Investors dumped Hong Kong stocks in a brief spell of panic selling as they sought to raise cash, with bellwether and global bank HSBC Holdings sinking to 27-month lows. Shares recouped some of their losses as the session neared the midday close, but the selling resumed in the afternoon session and blue chips closed down 2.4 percent.
Singapore's Straits Times Index ended lower. Shares of Singapore Press Holdings fell as much as 1.3 percent after the firm posted first quarter results below market expectations. Southeast Asia's largest publisher said its first quarter net profit rose 1.3 percent from a year ago, held back by a sharp fall in investment income and higher operating costs.
Chinese stocks also ended 1 percent down, with the Shanghai Composite Index lower as financial and property shares led the main index lower. But shares of trade-related companies in Fujian province stayed strong after the weekend's Taiwan election result.