Sun, Apr 17, 2005 - Page 10 News List

Asian markets slide after sharp downturn on NYSE

CORRECTION EXPECTED Worse-than-expected earnings at IBM, Sun and Samsung Electronics rattled the tech sector in Taiwan, leaving the TAIEX well short of 6,000 points


Asian stocks closed lower on Friday, extending losses after another sharp downturn on Wall Street as much weaker-than-expected quarterly results from IBM, Sun Microsystems and Samsung Electronics undercut sentiment, dealers said.

They said the results combined with disappointing US retail sales figures to raise fresh concerns on the outlook, with several markets slipping back badly to below their starting point this year.

Sydney, down 1.7 percent, was one as investors there sold down the key resources sector which had led the record-breaking run into March. The worry is that if the US economy falters, it will in turn impact China, which is a major market for Australian raw material suppliers, especially the miners.

This backdrop suggests that recent losses are building up into a significant correction on a much less optimistic view about the balance of this year.

Some dealers noted that commodity prices, including oil, whilst still high historically, have moderated in recent weeks and this could be a sign some investors are turning more defensive on the economic outlook.

On the day, Tokyo was the worst performer, losing 1.66 percent. The TAIEX closed 1.48 percent lower on Wall Street's continued falls and concerns about upcoming corporate results after much worse-than-expected earnings at IBM, Sun and Samsung Electronics rattled the tech sector, dealers said.

They said the decisive move down to leave the market well short of the key 6,000 points level was of concern, suggesting a major correction could be in the offing.

Most of the losses were in the old-economy stocks.

The weighted index closed down 88.31 points at 5,888.37, after moving between 5,875.67 and 5,946.20, on turnover of NT$79.06 billion (US$2.5 billion). Decliners led gainers 744 to 145, with 117 stocks unchanged.

Jih Sun Securities Investment Consulting Co (日盛投顧) assistant vice president Michael Hsu (許派一) said old-economy stocks were hit by concerns over higher costs.

"Old-economy stocks were hit on worries over prospects for profits given uncertainties surrounding the likelihood of cost-driven price hikes," he said.

"Investors are uncertain if these industries can fully pass on raw material prices hikes" to their customers, so raising the prospect that profit margins will suffer, Hsu said.

Japanese share prices closed 1.66 percent lower following heavy losses on Wall Street and after results at tech giants IBM, Sun Microsystems and South Korea's Samsung Electronics came in weaker-than-expected, dealers said.

The Tokyo Stock Exchange's benchmark NIKKEI-225 index tumbled 192.48 points to 11,370.69, just off the low of 11,343.73. The broader TOPIX index of all first section shares dropped 17.75 points or 1.52 percent to 1,150.67.

South Korean share prices closed down 0.7 percent at a two-month low, extending heavy losses for a second day as investors sold Samsung Electronics after disappointing quarterly results, dealers said.

The KOSPI index closed down 6.70 points at 947.22, the lowest since Feb. 4, when it finished at 933.55.

Hong Kong share prices closed 0.97 percent lower following falls on Wall Street amid concerns over the outlook for the US economy and corporate earnings, dealers said.

The Hang Seng Index closed down 133.65 points at 13,638.75, off a low of 13,579.16 and high of 13,672.74. The Hang Seng China Enterprises Index was down 76.54 points or 1.60 percent at 4,721.01.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top