Asian stocks fall on credit costs, slowing demand

Asian stocks fell the most this week since August on concern rising credit costs will dent bank earnings and slowing US growth will curb demand for televisions and cameras.

Mitsubishi UFJ Financial Group Inc and Westpac Banking Corp dropped as credit risk in the region rose to records, signaling expectations of an increase in global loan defaults. Sony Corp and Samsung Electronics Co led declines among companies reliant on US sales after manufacturing shrank and mortgage foreclosures climbed.

"We're seeing a pipeline of bad news, be it bank writedowns or the deterioration of the US economy," said Ivan Leung, who helps manage US$350 billion as Hong Kong-based chief investment strategist at JPMorgan Private Bank. "Markets are selling off whenever there's bad news and, to us, that's not indicative of a recovery."

The MSCI Asia Pacific Index declined 5.4 percent to 139.61, the biggest weekly slump since the five days ending Aug. 17. Financial stocks posted the second-largest percentage decrease among the index's 10 industry groups, trailing energy shares.

TAIPEI

Taiwanese share prices closed 1.47 percent lower, dealers said.

The weighted index closed down 127.26 points at 8,531.38. Turnover was NT$175.01 billion (US$5.68 billion).

Mega International Investment Services (兆豐國際投顧) assistant vice president Alex Huang (黃國偉) said Friday's fall was not surprising after the market hit a three-month high a day earlier.

"We can't expect Taipei to keep outperforming Wall Street and the others all the time," he said.

However, Huang said a scenario favoring a rise in the local market had not yet faded because the driving force behind recent gains remained intact.

That driving force was the belief that there will be a thaw in economic relations between Taipei and Beijing after the presidential election later this month, he said.

TOKYO

Japanese share prices tumbled 3.27 percent to a six-week low, hit by a stronger yen and a sell-off on Wall Street where fresh credit market problems rattled investors, dealers said.

The benchmark Nikkei-225 lost 432.62 points to 12,782.80, the lowest closing level since Jan. 22. The broader TOPIX index of all first-section shares dropped 39.78 points or 3.09 percent to 1,247.77.

HONG KONG

Hong Kong share prices closed down 3.6 percent, dealers said.

The Hang Seng index closed down 841.4 points at 22,501.33.

"Confidence in the market is very low at the moment because investors are weighing the impact of a US recession on the global economy," Sun Hung Kai Financial strategist Castor Pang said.

SYDNEY

Australian shares closed down 3.2 percent, dealers said.

The benchmark S&P/ASX 200 index was 171.5 points lower at 5264, while the broader All Ordinaries fell 163 points to 5368.9.

SHANGHAI

Chinese share prices closed 1.39 percent lower, dealers said.

The benchmark Shanghai Composite Index, which covers both A and B shares, fell 60.47 points to 4,300.52. The Shanghai A-share Index was down 1.39 percent to 4,512.22. The Shenzhen A-share Index shed 1.33 percent to 1,441.66. The Shanghai B-share index fell 1.54 percent to 309.48. The Shenzhen B-share index was down 0.35 percent to 632.73.

SEOUL

South Korean shares closed 2.0 percent lower, dealers said.

The KOSPI index closed down 33.47 points at 1,663.97.

SINGAPORE

Singapore shares prices closed 1.77 percent lower, dealers said.

The main Straits Times index fell 51.64 points to 2,866.28.

KUALA LUMPUR

Malaysian share prices closed down 0.3 percent, dealers said.

The Kuala Lumpur Composite Index closed down 3.36 points at 1,296.33.

BANGKOK

Thai share prices closed 0.74 percent lower, dealers said.

The Stock Exchange of Thailand (SET) composite index fell 6.14 points to 821.57.

MANILA

Philippine share prices closed 2.8 percent lower, dealers said.

The composite index slid 88.11 points to 3,028.73, its weakest close since Jan. 22.

MUMBAI

Indian shares plunged to close down 3.42 percent, dealers said.

The benchmark Mumbai stock exchange SENSEX fell 566.56 points to 15,975.52.