Asian stocks fell yesterday, led by commodity producers and industrial companies, as the worsening global recession drives down demand for raw materials.
Rio Tinto Group slumped 6 percent after shelving a US$2.15 billion expansion of an iron ore mine in Brazil. Keppel Corp, the world’s biggest oil rig builder, tumbled 7.3 percent following the cancellation of a US$405 million rig order. PetroChina Co (中石油) declined 3.9 percent as crude oil fell for a fifth day and US unemployment jumped.
“The global economy is continuing to deteriorate,” said Rob Patterson, who manages about US$2 billion at Argo Investments Ltd in Adelaide.
“If the US economy is slowing, it means they’re importing less from countries like China, and that China is buying fewer commodities. It’s not helpful to anyone,” he said.
The MSCI AC Asia Pacific excluding Japan Index fell 2.8 percent to 240.56 at 3:19pm in Hong Kong, extending a three-day, 4.9 percent drop. All 10 industry groups retreated. The index has lost 2.9 percent this year, building on a 53 percent drop in 2008.
Japan’s markets are closed for a holiday. Australia’s S&P/ASX 200 Index slipped 1.4 percent. The Kospi Index dropped 2.1 percent in South Korea, where Hyundai Motor Co slid 3.3 percent after planning to cut production. Wipro Ltd plunged 8.6 percent, leading declines in India, after the World Bank said the software exporter is barred from working for the institution.
The Standard & Poor’s 500 Index sank 2.1 percent on Friday, capping the worst week since November, after a government report showed the jobless rate climbed to 7.2 percent in December, more than economist estimates. Futures on the S&P 500 fell 0.4 percent yesterday.
Steel mills in Asia, Europe and North America are cutting purchases of raw materials as car manufacturers reduce output and companies cancel orders to build ships and offshore platforms.
Hyundai Motor said late on Friday it plans to cut first-quarter vehicle production in South Korea by as much as 30 percent amid plunging auto demand locally and overseas. The stock lost 3.3 percent to 45,150 won.
Keppel dropped 7.3 percent to S$4.56 after Scorpion Offshore Ltd terminated a US$405 million oil rig order. The company is also discussing a settlement with Lewek Shipping Pte for cancellation of a separate order.
Cosco Corp Singapore Ltd slipped 6.3 percent to S$0.82 after India’s Great Eastern Shipping Co. scrapped orders for two bulk carriers due to “the current uncertain business environment.” It is the second order cancellation for Cosco in a month.
Oil producers slumped as crude oil fell for a fifth day in New York, extending last week’s 12 percent drop, on concern demand will decline more rapidly than the OPEC cuts output. Crude for February delivery lost as much as 1.7 percent to US$40.15 a barrel in after-hours trading in New York.
PetroChina, China’s largest oil company, dropped 4.8 percent to HK$6.68. China Oilfield Services Ltd, a unit of the nation’s largest offshore oil producer, slumped 6.6 percent to HK$5.85.
PT Bumi Resources, Asia’s largest power-station coal exporter, fell 9.5 percent to 570 rupiah, capping a five-day, 39 percent plunge. Indonesia regulators said they will review Bumi’s takeover of three companies last week. The acquisitions sparked analyst downgrades on concern the company is overpaying.
China Eastern Airline Corp (中國東方航空), the nation’s third-largest carrier by fleet size, slumped 7.1 percent to HK$1.04 in Hong Kong, after the carrier said it lost about 6.2 billion yuan (US$906 million) on fuel hedging contracts last year.
PT Bumi Resources, Asia’s largest power-station coal exporter, fell 9.5 percent to 570 rupiah, extending a four-day, 33 percent plunge. Indonesia regulators said they will review Bumi’s takeover of three companies last week. The acquisitions sparked analyst downgrades on concern the company is overpaying.
Sun Hung Kai Properties (新鴻基地產集團), Hong Kong’s biggest developer by market value, dropped 2.4 percent to HK$68.35.
Wipro, India’s third-largest software exporter, plunged 8.6 percent to 229.35 rupees. The company is barred from World Bank contracts for four years from June 2007 for providing “improper benefits” to the bank’s staff, according to a statement on its Web site.
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