Sun, May 29, 2011 - Page 10 News List

Europe woes drive Asian stocks down a fourth week

Staff Writer, with Agencies

Asian stocks fell, dragging the region’s benchmark index to its biggest string of weekly losses in two years, as concern deepened over Europe’s debt crisis and amid speculation a slowing global recovery will crimp earnings.

“Issues like the softening growth rate of business activity and Europe’s debt problems have prompted investors to look for reasons to sell,” said Angus Gluskie, who manages about US$350 million at White Funds Management Pty in Sydney. “Long-term investors are sitting on the sidelines and short-term traders are selling into the market. It’s opening up some good value in many stocks, and I suspect we’ll see buying start to emerge.”

The MSCI Asia-Pacific Index declined 0.2 percent to 134.34 this week, its fourth straight drop, completing the biggest string of weekly losses since June 2009. The gauge dropped over the previous three weeks as Japan’s economy contracted, disappointing US economic data fueled concern about the global recovery and China restricted bank lending, stoking concern anti-inflation policies may slow growth in the world’s second-biggest economy.

TAIWAN

The TAIEX dropped 0.3 percent this week, a second straight week of losses.

Share prices posted gains on Friday as follow-through buying continued to lift the bellwether electronics sector on expectations that Computex Taipei 2011, Taiwan’s largest computer fair, which is set to open next week, will boost local consumption, dealers said.

Apple Inc’s official release of its iPad2 tablet computer in the local market on Friday also kept high-tech shares in the market spotlight, they said.

The weighted index on Friday rose 21.60 points, or 0.24 percent, to 8,810.00, after moving between 8,803.59 and 8,860.03, on turnover of NT$96.30 billion (US$3.34 billion).

Against the gains on the broader market, food shares fell 0.8 percent, textile stocks shed 0.3 percent, construction stocks lost 0.2 percent, and the financial and cement sectors closed down 0.1 percent.

“Lingering concerns over the global economic climate remained in place, leaving many investors reluctant to chase prices for the moment,” TLG Asset Management (台壽保投信) analyst Arch Shih (施博元) said.

Shares of food firms were under pressure as more products were found to contain di(2-ethylhexyl) phthalate, or DEHP, which is banned as a food and beverage additive, dealers said.

“More and more investors are turning away from food stocks at the moment amid fears that the contamination wave will continue to spread,” MasterLink Securities (元富證券) analyst Tom Tang said.

Japan’s Nikkei 225 Stock Average fell 0.9 percent. South Korea’s KOSPI retreated 0.5 percent and Australia’s S&P/ASX 200 Index dropped 1 percent in the week.

Hong Kong’s Hang Seng index slipped 0.4 percent, even as luxury retailers surged after recent data showed visitors to Hong Kong increased.

“The biggest concern about Europe is the risk of contagion and of credit markets drying up globally,” said Prasad Patkar, who helps manage about US$1.8 billion at Platypus Asset Management Ltd in Sydney.

“The memory of the global financial crisis is fresh in everyone’s mind, and everybody’s preference is that we don’t go there again,” Patkar said.

In other markets on Friday:

Manila closed 1.04 percent, or 43.95 points, higher from Thursday at 4,274.51.

Wellington was flat, edging up 0.37 points from Thursday to 3,527.96.

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