Asian stocks fell, driving the region’s benchmark index to its largest weekly drop in 13 months, on concern that slowing global economic growth will dent demand for raw materials and other goods.
BHP Billiton Ltd and CNOOC Ltd (中國海洋石油) plunged more than 10 percent this week after metal and crude oil prices tumbled. LG Electronics Inc, the world’s No. 3 television maker, dropped 7.4 percent after a slump in South Korea’s overseas shipments sparked fears of an economic slowdown.
Taiwan’s Hon Hai Precision Industry Co (鴻海精密) lost 11 percent, leading technology companies lower, following its first earnings decrease in seven years and as US consumer spending waned and jobless claims increased.
The MSCI Asia-Pacific Index dropped 6.7 percent to 116.85, the biggest slump since the five days ended Aug. 17 last year. All 10 industry groups retreated, with measures tracking energy and mining companies posting the biggest losses.
The regional gauge has dropped 26 percent this year to the lowest since June 13, 2006, as soaring fuel prices damped consumer spending and eroded corporate profits, while writedowns and credit losses at the world’s largest financial companies topped US$500 billion.
“There’s no place to hide within Asia right now,” said Beat Lenherr, who oversees more than US$20 billion in assets as Singapore-based chief global strategist at LGT Capital Management. “We’re cautious on the commodities sector given there is an intermediate peak in oil prices, which will put a lid on energy-related stocks.”
Taiwanese share prices are expected to stage a technical rebound next week after recent heavy losses, but the upside may be limited amid concerns over a global economic slowdown, dealers said on Friday.
Bargain hunters are likely to trade actively, targeting electronic heavyweights on hopes that the current peak season will boost their profitability, they said.
However, investors were advised to keep their hands off old-economy stocks for now amid pessimism that weak consumption will hurt sales in the domestic market, they added.
Technical factors are expected to lift the market to around 6,500 points next week, but lingering economic growth worries may send the index down to 6,000 points, dealers said.
For the week to Friday, the TAIEX lost 738.83 points or 10.49 percent to 6,307.28 after a 1.95 percent increase a week earlier.
Japanese shares lost 2.75 percent, dealers said.
The Tokyo Stock Exchange’s benchmark Nikkei-225 index lost 345.43 points to close at 12,212.23, the lowest close since mid-March.
The broader TOPIX index of all first-section shares dropped 30.81 points or 2.56 percent to 1,170.84.
The Nikkei briefly fell more than 3 percent in early trading due to concerns that speculators may place big sell orders in Nikkei futures.
Share prices closed down 2.2 percent, dealers said. The benchmark Hang Seng Index closed down 456.2 points at 19,933.28, the first time it dived below the key 20,000 point level since early last year.
Australian shares plunged 2.1 percent, dealers said.
The benchmark S&P/ASX 200 closed down 102.4 points at 4,877.1, while the broader All Ordinaries shed 101.4 points to 4,949.5.
Chinese share prices closed down 3.29 percent, dealers said. The benchmark Shanghai Composite Index, which covers both A and B shares, was down 74.97 points to end at a near 21-month low of 2,202.45.