Asian stocks declined for a third week after Standard & Poor’s Rating Service cut the US credit rating and as concern grew Europe’s debt crisis would spread, sparking speculation the global economic recovery would weaken.
“Fear has taken over,” said Paul Xiradis, who manages about US$12 billion in assets as CEO of Ausbil Dexia Ltd in Sydney. “It’s like a rapid fire burning away the market, but like all things it’s going to exhaust itself eventually. There are obviously still concerns about what’s happening in the US, Europe and China, but it appears to me we’re seeing all the classic signs of a blowout or a climax.”
The MSCI Asia Pacific Index dropped 3.3 percent to 121.92 for the week, extending a three-week decline to 12.3 percent. Investor confidence has eroded in recent weeks as a deadlock in the US Congress brought the government to the brink of default, while economic reports showed the world’s biggest economy was slowing. Signs Europe’s debt crisis was widening also battered sentiment.
Japan’s Nikkei 225 Stock Average sank 3.6 percent for the week after the government cut its forecast for economic growth this year to 0.5 percent from 1.5 percent previously after the earthquake and tsunami in March disrupted production. South Korea’s KOSPI slumped 7.7 percent even after the central bank left interest rates for a second month. Taiwan’s TAIEX fell 2.7 percent to 7,637.02, led by the drop in tech heavyweight HTC Corp (宏達電)
China’s Shanghai Composite Index fell 1.3 percent this week after the country’s inflation accelerated to the fastest pace in three years in July, limiting the scope for monetary easing to support growth. China’s benchmark index along with Hong Kong’s Hang Seng Index and Australia’s S&P/ASX 200 Index dropped more than 20 percent from their peaks this week, entering so-called bear markets.
The MSCI Asia Pacific Index has tumbled 12.4 percent since July 26 amid a global selloff that erased more than US$7 trillion from world markets since July 26. The slump deepened this week after S&P on Aug. 5 downgraded the US credit rating. The Asian gauge is trading at 12.2 times estimated earnings, the lowest since December 2008.
The global stocks rout prompted South Korea, France, Spain, Italy and Belgium to ban short selling. Short-sellers sell borrowed shares with plans to buy them back later at a lower price, a practice politicians and some investors blame for roiling markets.
In other markets on Friday:
Manila rose 0.25 percent, or 10.71 points, from Thursday to 4,321.73.
Wellington closed up 0.25 percent, or 7.88 points, from Thursday at 3,216.50.
Singapore closed 1.94 percent, or 54.37 points, higher from Thursday at 2,850.59.
Jakarta shares rose 0.55 percent, or 21.16 points, from Thursday to 3,890.53.
Kuala Lumpur ended up 0.49 percent, or 7.21 points, from Thursday to close at 1,483.67.
Mumbai closed down 1.29 percent, or 219.77 points, from Thursday to end at 16,839.63, as investors unwound positions before the long Independence Day weekend, which sees the Bombay Stock Exchange shut tomorrow.
Bangkok’s markets were closed on Friday.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained