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Asian Markets Slide, South Korea Sheds 2.5%

CNBC.com
Wednesday, 2 Jul 2008 | 7:37 AM ET

Most Asian markets stayed firmly in negative territory Wednesday, led by Seoul's 2.5 percent slide as persistently high oil prices and their impact on economies remained the key theme keeping investors worried.

Crude oil is trading higher above $142 a barrel, on forecasts global supplies will struggle to keep pace with demand and concerns that ongoing tensions between Israel and Iran could lead to a disruption of exports from the OPEC nation.

Strong crude prices are boosting shares in energy firms such as China's CNOOC, up 5 percent. Australia's Woodside Petroleum ended over 1 percent higher.

Japan's Nikkei 225 Average finished 1.3 percent lower to set its longest losing streak in more than 40 years, as worries about the global economy hit exporters
such as Canon. Shipping firms extended recent losses after freight charges on the Baltic Dry Index dropped over 2 percent and on worries high oil prices would hurt demand from emerging markets.

Seoul shares fell 2.6 percent, extending their losing streak to 5.5 percent over the past five sessions, with higher oil prices and worsening worries about inflation and economies slamming
sentiment for equities. Hynix Semiconductor shed over 3 percent.

Australian shares fell 0.9 percent, inching closer to a 2008 closing low, with top miners leading losses on worries about the economic impact of high oil prices, while retailer Just Group dropped on a profit warning.

Hong Kong shares shed 1.8 percent, buckling under inflationary pressures from record oil prices and anticipation of rate hikes in the United States and China, while oil producer CNOOC rose 5.1 percent. Another index heavyweight, top global wireless operator China Mobile, joined the market slump with a 0.9 percent drop after hitting its lowest level since late March.

China's Shanghai Composite Index closed flat after gaining over 1 percent earlier in the session on positive commentary about the market by the official Xinhua news agency caused some investors to hope that authorities might act to support shares.

Singapore's Straits Times Index was also flat with banks and other big caps such as SIA in positive territory.