Asian stocks declined for a fourth straight week, the longest streak since August, amid Europe’s worsening debt crisis, speculation that Japan may face a credit-rating cut and evidence that China’s factory output may have contracted.
BlueScope Steel Ltd, Australia’s biggest steelmaker, led declines, sliding 27 percent after announcing it would sell new shares at a 34 percent discount to raise capital and pay debt. Taiwan-based HTC Corp (宏達電), the largest seller of smartphones in the US, plunged 26 percent after cutting its sales forecast and being downgraded by Citigroup Inc and Barclays Capital.
“Europe cannot drag its feet anymore,” said Ng Soo Nam, Singapore-based chief investment officer at Nikko Asset Management Asia Ltd. “Some countries in Europe will probably go into recession. Chinese data suggest small and medium-sized manufacturers are already feeling the effects of the liquidity crunch.”
The MSCI Asia Pacific Index dropped 4.6 percent to 108.95, extending a four-week decline to 12.6 percent. The index erased last month’s gains and fell to its lowest level since Oct. 5.
Australia’s S&P/ASX 200 dropped 4.6 percent, the most among the major Asia-Pacific indicies, as Europe’s debt crisis shows no sign of easing. German Chancellor Angela Merkel ruled out common eurozone bonds and a bigger role for the European Central Bank in fighting the crisis.
Taiwan’s TAIEX plunged this week, falling 6.2 percent to close at 6,784.52 on Friday.
Concern that Japan may soon be faced with unsustainable lending costs led the Nikkei 225 Stock Average to fall 2.6 percent. The broader TOPIX index lost 1.9 percent, taking its decline to 21 percent this year, and is less than 1 percent away from levels not seen since 1983.
Hong Kong’s Hang Seng Index declined 4.3 percent this week, while China’s Shanghai Composite Index fell 1.5 percent. India’s Sensitive Index, or Sensex, slumped 4.8 percent.
Olympus Corp rose 77 percent this week to ¥1,107 as investors bet the company would be able to contain losses and meet a Dec. 14 deadline for reporting its results and avoid delisting from the Tokyo Stock Exchange. Michael Woodford, former chairman of the Japanese camera maker, this week pledged to work with the board to avoid the threat of delisting after three executives implicated in a scheme to hide losses resigned.
“Funds are buying back as their concerns are easing that the company may get delisted and has more hidden losses,” said Kenichi Hirano, general manager and strategist at Tachibana Securities Co in Tokyo. “Olympus’ image would also improve if Woodford returns.”
HTC dropped 26 percent this week to NT$489.50, its lowest close since July 9 last year. The stock has dropped 60 percent from its record-high on April 28, erasing about US$23 billion in value.
HTC cut its fourth-quarter revenue forecast amid competition from Samsung Electronics Co and Apple Inc. The news has prompted at least six brokers, including Citigroup and Credit Suisse Group AG, to downgrade the stock.
In other markets on Friday:
Manila ended 0.56 percent, or 23.94 points, higher from Thursday at 4,261.59. Wellington closed 0.89 percent, or 28.82 points, lower from Thursday at 3,212.27.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by