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Credit losses hamper Asian stocks

Asian stocks fell to a two-month low this week, led by exporters such as Sony Corp and Hon Hai Precision Industry Co Ltd (鴻海精密), on concern widening credit losses in the US and record oil prices will slow global growth.

Posco led the slide among steelmakers and transportation stocks such as Qantas Airways Ltd and China Cosco Holdings Co fell after oil prices climbed to a record US$111 a barrel.

"The weakness in the US economy, coupled with high commodity prices, is combining to eat into margins for many Asian companies," said Ivan Tham, who helps oversee the equivalent of US$5 billion in Asian assets at City of London Investment in Singapore.

The MSCI Asia Pacific Index slid 2.6 percent this week, extending last week's 5.4 percent slump and this year's loss to 14 percent. Japan's Nikkei 225 Index dropped 4.2 percent, falling to its lowest since Aug. 10, 2005.

China's CSI 300 Index fell 10 percent this week, its biggest drop on record and the steepest loss in the region, on concern the government will raise interest rates to contain inflation, slowing growth in the world's fastest growing major economy.

A regional measure that includes steel and commodities companies dropped 4.9 percent and an index that includes airlines and shippers declined 4.2 percent, the worst performers among the MSCI Asia Pacific's 10 industry groups.

"There's fear in the markets," said David Ng, who helps manage about US$1 billion at Hwang-DBS Asset Management Sdn in Kuala Lumpur. "It's a case of when it rains, it pours, and it's pouring. What the market needs to know is how many more Carlyles are there."

Hon Hai, the world's largest contract manufacturer of consumer electronics, slumped 7.7 percent to NT$174.50, its second-biggest weekly decline this year, on concern that widening subprime losses will cool economic growth.

TAIPEI

Taiwanese share prices closed 0.6 percent lower, dealers said.

The weighted index closed down 49.6 points at 8,161.39 on turnover of NT$109.03 billion (US$3.55 billion).

Michael On (洪瑞泰), president of Beyond Asset Management Co (晉昂證券投顧), said economic worries and political concerns kept investors at bay.

"Sluggish regional markets in the morning reminded investors of global economic concerns amid high energy costs," On said.

With presidential polls being held next week, many investors also cut their positions on fears over political uncertainty.

TOKYO

Japanese shares closed down 1.54 percent at the lowest level for two years and seven months on worries about a stronger yen and the weakness of the US economy, dealers said.

The benchmark Nikkei-225 index dropped 191.84 points to 12,241.60. The broader TOPIX index of all first-section shares ended down 22.64 points or 1.86 percent at 1,193.23.

HONG KONG

Hong Kong share prices closed 0.29 percent lower, dealers said.

The Hang Seng index closed down 64.53 points at 22,237.11.

For the week the Hang Seng is down 264.22 points or 1.17 percent, while for the year to date it is down 5,575.54 points or 20 percent.

SYDNEY

Australian shares closed 1.4 percent higher, dealers said.

The benchmark S&P/ASX 200 closed up 71 points at 5,206.9, while the broader All Ordinaries rose 72.8 points to 5,288.5.

SHANGHAI

Chinese share prices closed 0.22 percent lower, dealers said.

The benchmark Shanghai Composite index, which covers both A and B shares, fell 8.58 points to 3,962.67.

The Shanghai A-share index was down 0.21 percent to 4,157.52. The Shenzhen A-share index shed 0.86 percent to 1,302.12.

The Shanghai B-share index was down 0.68 percent to 288.33. The Shenzhen B-share index lost 1.55 percent to 572.61.

SEOUL

South Korean shares finished one percent lower on Friday, dealers said.

The benchmark KOSPI closed down 15.36 points at 1,600.26.

SINGAPORE

Singapore shares closed 1.2 percent higher on Friday, dealers said.

The Straits Times Index rose 33.46 points to close at 2,839.01.

"As we don't foresee a recession in the Singapore economy, despite our view that the US has already entered a recession, we believe that the market might have neared its bottom," Westcomb Securities said in a note to clients.

KUALA LUMPUR

Malaysian share prices closed 0.5 percent lower, dealers said.

The Kuala Lumpur Composite Index lost 6.51 points to 1,194.84.

BANGKOK

Thai share prices closed up 0.46 percent, dealers said.

The Stock Exchange of Thailand (SET) composite index rose 3.73 points to 818.04 and the blue-chip SET-50 added 2.80 points to 591.03.

JAKARTA

Indonesian shares closed 2.3 percent lower. The Jakarta Composite Index finished down 57.17 points at 2,383.42.

MANILA

Philippine share prices closed 1.2 percent lower, dealers said.

The composite index fell 33.94 points to 2,906.53 points. The broader all-share index lost 12.47 points or 0.7 percent to 1,784.44.

WELLINGTON

New Zealand share prices tumbled to close 2.04 percent lower, dealers said. The benchmark NZX-50 gross index dropped 73 points to 3,500.91.

MUMBAI

Indian shares rose 2.63 percent on Friday on bargain-hunting by domestic mutual funds, dealers said.

The Mumbai stock exchange SENSEX index rose 403.17 points to 15,760.52.
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