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Asian Stocks Slump on Wall Street Sell-Off

Published: Thursday, 29 Oct 2009 | 6:10 AM ET

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By: Reuters

Asian stock markets slumped on Thursday after weak new U.S. home sales data sparked a broad sell-off on Wall Street.

Sydney, Hong Kong and Taipei retreated over 2 percent each as selling intensified in the trading session.

The Nikkei Average [JP;N225 Loading... () ] closed lower, dented by exporters such as Adventest and Elipda Memory while financials cushioned the slide. The broader Topix fell 0.7 percent to end at 882.2 points.

NEC Electronics trimmed losses to 8.9 percent after plunging 13 percent earlier. The company had reported on Wednesday a far bigger 15.5 billion yen quarterly loss and cut its annual outlook on weaker chip sales.

Nippon Mining shares were hurt after the oil and metals company lowered its profit estimate 29 percent from its previous guidance due to a decline in profit margins on oil products.

In contrast, Takefuji Corp rose 5.1 percent following a report the consumer lender would more than double its profit forecast and likely post a group quaterly net of about 17 billion yen.

Shiseido rose 3 percent. The country's biggest cosmetics firm maintained its operating profit forecast, saying firmer-than-expected domestic sales offset pressure from a strong yen.

Shares of Nippon Steel climbed 1.5 percent as the world's top No. 2 steelmaker raised its full-year outlook to above market expectations.

Financials chalked up gains as investors sought stocks dependent on domestic demand. Solid earnings by Nomura Holdings also helped lift shares of banks. Mitsubishi UFJ, Japan's top lender, jumped 3.4 percent and Mizuho Financial climbed 2.3 percent.

The Korea Composite Stock Price Index ended the session down 1.5 percent to 1,585.85 points, a two-month closing low, led by steel stocks and shipbuilders.

Shares tumbled as foreign investors sold stocks and moved to safer assets after bleak U.S. home sales data underscored concerns about weakening economic recovery momentum.

POSCO, the world's No. 4 steel producer, slumped 5 percent after sector leader ArcelorMittal dampened recovery expectations on Wednesday with a muted forecast for the final three months of 2009.

Shares of shipbuilders extended yesterday's losses on continued concerns about an industry downturn. Hyundai Heavy Industries, the world's top shipbuilder, shed 3.5 percent and Daewoo Shipping & Marine lost 2.1 percent.

SK Energy shares also headed south after the country's top oil refiner posted a drop in quarterly profits on Wednesday.

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The benchmark S&P/ASX 200 [AU;XJO Loading... () ] lost 110 points to 4,574.7, it's biggest one-day percentage drop in four months. The index fell 1.4 percent on Wednesday.

Stocks were weighed down by miners and banks including Australia & New Zealand Banking Group, on concerns about the health of the global economy.

ANZ fell 2.1 percent. It reported year profit above expectations but gave a cautious outlook. Macquarie, the country's top investment bank, lost 3.3 percent.

Big miners BHP Billiton and rival Rio Tinto skidded 3.3 and 4.9 percent respectively on softer oil and metal prices.

New Zealand's benchmark NZX 50 index fell 0.22 percent to 3,195.6.

Shares of Fisher & Paykel Healthcare rose as much as 5 percent as the New Zealand dollar tumbled after the central bank left interest rates on hold. The medical equipment maker makes most of its earnings in U.S. dollars.

Wall Street Closing Numbers

Taiwan's Taiex slumped 2.3 percent to log its biggest daily fall in 3- 1/2 month, spooked by renewed worries about the strength of the global recovery.

Computer brand Acer fell 4.3 percent. UMC, the world's second-largest contract chip maker, fell 0.6 percent after it forecast weaker fourth-quarter shipment.

Property stocks plunged following a report that Taiwan's central bank has urged banks to take note of risk management on loans. Real estate developer Farglory declined 5.1 percent.

China's key Shanghai Composite Index shed 2.3 percent. Telcos, banks, insurers, airlines and energy stocks fell across the board.

Hong Kong's Hang Seng lost 2.3 percent as the index tracked Wall Street's overnight losses.

PetroChina slid 5.2 percent in reaction to weak third-quarter earnings.

Nine Dragons Paper declined 12 percent on news the packaging and paperboard maker would sell HK$2.87 billion ($370 million) worth of new shares to its controlling shareholder.

Geely Automobile Holdings was in focused after Ford [F Loading... () ] named Geely's major shareholder, Geely Zhejiang Geeling Holdings, as preferred bidder for its Swedish unit Volvo. Geely shares rose as much as 4.5 percent but pared gains to 2 percent in afternoon trade.