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Jitters about US housing slump sap Asian stocks

A stock broker reacts as he monitors the Bombay Stock Exchange on a trading screen in Mumbai on Friday. Indian shares fell more than 3 percent on Friday as investors remained jittery over a move by the stock market regulator to curb buying by foreign funds. PHOTO: AP

Asian stocks had their biggest weekly drop in two months, led by financial companies, on concern losses from the worst US housing slump since 1991 will spread.

Mitsubishi UFJ Financial Group Inc and Westpac Banking Corp declined after Citigroup Inc and other US lenders posted lower profits due to housing-loan writedowns and trading losses. Nomura Holdings Inc, Japan's biggest securities company, fell to a three-week low after saying it will report its first quarterly loss in more than four years.

Japan's NIKKEI 225 Stock Average had its steepest slide in two months. India's Sensitive Index had its first weekly drop since August, leading declines among Asia's benchmarks, on concern proposed overseas investment rules will curb capital inflows.

"There's probably going to be more bad news before we start to hear good news," said Adrian Lim, who helps manage about US$50 billion at Aberdeen Asset Management Asia Ltd in Singapore. "Some of the banks in Asia that have strayed from their core business and invested in US home loan-related instruments could be affected."

The Morgan Stanley Capital International Asia-Pacific Index fell 1.4 percent to 165.77 this week, its first decline since the five days ended Sept. 14. A measure of financial shares in the index slid 3.6 percent, the biggest loser among the 10 industry groups.

TAIPEI

Taiwanese share prices closed down 0.26 percent as concerns over oil prices, which are hovering at record highs, outweighed gains in select technology stocks.

Dealers said strong earnings reports from global majors such as Nokia and Google and failed to lift the broader market but AU Optronics Corp (友達光電) and other flat-panel makers were up on solid earnings prospects.

The weighted index closed down 25.35 points at 9,611.72 on turnover of NT$139.00 billion (US$4.28 billion).

"Many [investors] would rather stay put for now although the local market has been more resilient than regional counterparts and Wall Street lately," said Wilson Lien, deputy manager at Jih Sun Services Investment Trust Co (日盛投信).

He said the index was confined to a range of less than 70 points on Friday, with turnover also contracting sharply from the previous session.

Lien said it was not surprising to see the market take a breather ahead of more earnings releases in Taiwan and the US next week.

TOKYO

Japanese share prices tumbled 1.7 percent to a three-week low, hit by worries about a stronger yen and the impact of a credit squeeze on US banks.

Dealers said the benchmark NIKKEI index sank back below the key 17,000 points level as the rising yen dimmed the outlook for exporter earnings.

The NIKKEI-225 index fell 291.72 points to 16,814.37.

SHANGHAI

Chinese share prices closed 0.12 percent lower amid lingering fears about a government plan to allow mainland investors to buy stocks in Hong Kong.

The Shanghai Composite Index closed down 7.24 points at 5,818.05, down 1.44 percent for the week.

SEOUL

South Korean shares closed 1.8 percent lower as investors feared that oil prices may rise further and derail the global economy's growth momentum.

The KOSPI index closed down 34.99 points at 1,970.10.

SYDNEY

Australian share prices closed down 0.9 percent as investors locked in gains after a recent sharp rise and with falls in Asia weighing on sentiment.

The S&P/ASX 200 index closed down 61.4 points at 6,706.3.

SINGAPORE

Singapore share prices closed 1.62 percent lower, dragged down by banking stocks ahead of their third-quarter earnings reports next week.

The Straits Times Index closed down 61.71 points at 3,747.98.

MUMBAI

Indian share prices slid 2.44 percent in volatile trade as investors chose to unwind positions fearing sharper falls on concerns over capital flow controls.

Dealers said the markets could drop further until clarity emerges on a derivatives regulatory proposal on participatory notes.

The SENSEX index closed 438.41 points down to 17,559.98.

"Investors nerves are still rattled. We expect the markets to remain choppy on low volumes until clarity on the P-note proposal comes through," said a dealer with brokerage ULJK Securities.
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