Asian stocks fell this week, led by the biggest drop in the Nikkei 225 Stock Average in two years, after Japan’s strongest ever earthquake and a nuclear crisis sparked concern that the global economic recovery is in jeopardy.
Equities pared losses on Friday after the G7 nations said they would sell yen to weaken Japan’s currency and prevent a recession. Tokyo Electric Power Co, Asia’s largest power generator, plunged a record 55 percent as it battled to avert a meltdown at the Fukushima Dai-ichi nuclear power plant. Toyota Motor Corp, Fuji Heavy Industries Ltd and Nikon Corp lost more than 10 percent after shutting factories damaged in the earthquake.
“It’s still too early to say that we’ve seen the bottom yet,” said Shane Oliver, head of investment strategy in Sydney at AMP Capital Investors Ltd, which manages US$98 billion. “The cost to the Japanese economy will be huge. The damage to factories, power supply, transport infrastructure and confidence will depress economic activity before rebuilding kicks in.”
Japanese stocks briefly entered a bear market last week after the Nikkei 225 lost as much as 24 percent from a high on Feb. 21, reaching the lowest level since April 2009 before rebounding. The index declined 10 percent to 9,206.75, the biggest weekly loss since October 2008.
The MSCI Asia Pacific Index tumbled 4.4 percent, the most in almost 10 months, to 129.03. The MSCI Asia Pacific excluding Japan Index fell 1.8 percent to 452.76.
Taiwan’s TAIEX fell 173.07 points, or 2.02 percent, for the week.
South Korea’s KOSPI gained 1.3 percent, led by commodity producers on speculation rebuilding in Japan will boost raw-material demand. Hong Kong’s Hang Seng Index dropped 4.1 percent and Singapore’s Straits Times Index lost 3.5 percent. China’s Shanghai Composite Index and Australia’s S&P/ASX 200 index fell less than 1 percent.
The Bank of Japan pumped a record ¥15 trillion (US$190 billion) into money markets on Monday to assure financial stability.
“It’s a confidence issue about how long it’s going to take to get through the situation in Japan,” said Lorraine Tan (陳麗子), director of equity research for Asia at Standard & Poor’s in Singapore. “The first word that comes to mind about this week would be ‘volatile.’”
The Nikkei Stock Average Volatility Index, a measure of Japanese option prices, soared 113 percent to 49.95 for the biggest weekly advance since data on the measure began in 2001. The gauge shows options traders expect a 14 percent swing in the Nikkei 225 in the next 30 days.
In other markets on Friday:
Manila closed 0.33 percent, or 12.50 points, higher from Thursday at 3,829.88.
Wellington rose 0.30 percent, or 9.92 points, from Thursday to 3,339.51.
Mumbai closed 1.49 percent, or 271.06 points, lower from Thursday at 17,878.81.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to