Asian Markets Sink on US Financial Worries
Asian markets continued their weak run Tuesday with financial stocks sinking after U.S. credit card firms and banks were downgraded, stoking fears their troubles could spread to the global sector.
U.S. stocks ended lower on Monday after brokerages downgraded banks and credit card companies on signs consumers are falling behind on debt payments.
The Nikkei 225 Average finished lower with exporters such as Honda Motor coming under pressure after downgrades of U.S. credit card firms fuelled recession fears. Investors dumped shares of companies issuing disappointing earnings results.
Olympus tumbled nearly 14 percent after cutting its outlook due to a stronger yen and falling camera prices.
South Korea's KOSPI bucked the negative trend and rose 0.4 percent to a two-week closing high, as exporters such as LG Electronics rose despite persistent worries about a U.S. economic recession, with trade thinned before the lunar New Year holiday. Financial markets are closed from Wednesday until Friday for the Lunar New Year holidays. The markets will resume trading on Feb. 11.
Australian shares shed 1.2 percent after the central bank delivered a widely expected hike in official interest rates. Retailers such as JB Hi-Fi hit as investors worried about the impact of the central bank's latest interest rate rise on consumer spending. The Reserve Bank of Australia pushed through another quarter-percentage point rate hike, its third in seven months, despite the slowdown in global growth.
Hong Kong stocks fell 0.9 percent as sentiment remained weak on concerns over a slowing world economy, but power plays such as CLP Holdings continued to shine. China's two leading fixed-line carriers, China Telecom and China Netcom after UBS on Monday downgraded the two stocks to sell from neutral on valuation.
Singapore's FTSE Straits Times Index ended 1.3 percent lower with banks such as OCBC and UOB edging down.
Chinese shares fell 1.6 percent, led down by banking shares and index heavyweight PetroChina, after soaring on Monday in response to official measures in support of the market. The Shanghai Composite Index jumped 8.13 percent on Monday, its biggest daily rise since June 2005.