Sun, Mar 24, 2013 - Page 15 News List

Asian stocks plunge as eurozone debt crisis intensifies

THE HAUNTING:Taiwan’s main index joined its regional counterparts in trending down, but select stocks such as Hon Hai proved resilient on optimism over orders

Agencies, HONG KONG and TAIPEI

Asian stocks fell, with the regional benchmark index posting the biggest weekly drop in seven months, as Cyprus struggled to prevent a financial collapse, stoking concern Europe’s debt crisis is intensifying.

The MSCI Asia Pacific Index fell 1.7 percent to 134.31 this week, the biggest weekly decline since the period ended Aug. 31, amid concern that an unprecedented levy on bank deposits in Cyprus may be a sign of deepening crisis in Europe.

“Nobody knows what’s going to happen next,” said Grace Tam, Hong Kong-based global market strategist at JPMorgan Asset Management. “Cyprus can damp market sentiment in the short term, but it’s something we’ve already seen happening in Europe, so we are not fairly concerned.”

The MSCI Asia Pacific Index has rallied 3.8 percent this year, as improving economic data from the US and speculation that Japan will deploy more stimulus countered concern China will move to cool its property market.

Asia’s benchmark trades at 14.9 times average estimated earnings, compared with 14.1 for the Standard & Poor’s 500 Index and 12.7 for the STOXX Europe 600 Index, according to data compiled by Bloomberg.

Taiwan’s TAIEX slid 1.66 percent to 7,796.22 points this week, following Wall Street’s lead amid concern over developments in Cyprus. While the broader market trended lower, select high-tech stocks such as Hon Hai Precision Industry Co (鴻海精密), a major supplier to Apple Inc, remained resilient on hopes that the US electronics giant would launch new iPhone and iPad models in June, dealers said.

“The Cyprus issue came back to haunt investors at home and abroad,” Hua Nan Securities (華南永昌證券) analyst Henry Miao (苗台生) said on Friday.

“Investors here preferred to stay on the sidelines as they feared that Wall Street would suffer a major correction sometime soon, after its recent strong showing, due to uncertainty over the eurozone,” Miao said.

“Even if the market stages a technical rebound, it will not be easy for the index to overcome the stiff technical resistance ahead of 7,900 points. I expect the local bourse will continue to move in a narrow range over the next few sessions,” Miao said.

The TOPIX, Japan’s broadest share gauge, fell 1.2 percent this week even after reaching the highest close since October 2008 on Thursday.

Australia’s S&P/ASX 200 Index dropped 3 percent this week, the biggest weekly drop since May. Singapore’s Straits Times Index slid 0.8 percent. South Korea’s KOSPI declined 1.9 percent.

Hong Kong’s Hang Seng Index fell 1.9 percent. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, rose 2.2 percent as a private survey on Thursday showed Chinese manufacturing may expand faster than estimated.

India’s S&P BSE Sensex fell 3.6 percent amid concern the withdrawal of the government’s biggest partner from the ruling alliance may jeopardize economic reforms.

Japanese shares fell after new Bank of Japan Governor Haruhiko Kuroda on Thursday failed to outline any immediate increase to stimulus in his first press conference.

He restated that he would do whatever it takes to achieve a 2 percent inflation target and that he might bring forward open-ended asset purchases, though he made no concrete commitments.

In other markets on Friday:

Manila closed 0.71 percent higher from Thursday, adding 45.73 points to 6,518.71.

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