Asian stocks fell for the first week in three amid a deteriorating outlook for corporate profits and doubts over whether US stimulus measures will succeed in alleviating the financial crisis.
Nomura Holdings Inc, Japan’s biggest brokerage, fell 17 percent in the week on share-sale plans and as US Treasury Secretary Timothy Geithner said he needed time to work out details of a bank-rescue plan unveiled on Tuesday. Sony Corp, which makes a quarter of its sales in the US, lost 7.8 percent in Tokyo. Electronics maker Pioneer Corp dropped 13 percent in Tokyo after it widened its full-year loss forecast.
“Investors are disappointed with the lack of clarity on the US bank-rescue plan,” said Daphne Roth, Singapore-based head of Asia equity research at ABN Amro Private Bank, which manages about US$27 billion of Asian assets. “We will see more earnings downgrades going into the next few months and that’s going to drag down Asian stocks at least till the end of the first half.”
The MSCI Asia-Pacific Index slipped 2 percent to 81.75 in the past five days, following a 3.9 percent increase in the previous two weeks. The gauge is down 8.7 percent this year amid mounting signs the global recession is hurting corporate profits.
Taiwanese shares are expected to be volatile next week as the market moves closer to the nearest resistance level of around 4,700 points, dealers said on Friday.
Many investors would like to remain sidelined, watching closely how Wall Street performs amid caution over the effects of a massive US economic stimulus package, they said.
However, adequate liquidity is likely to lend support to the broader market, with foreign institutional investors continuing to rebuild their positions by targeting the bellwether electronics sector, they added.
The market is expected to pull back after jumping above the 4,700 point mark, while there may be a floor at around 4,300 to 4,400 points, according to dealers.
In the week to Friday, the weighted index rose 119.25 points or 2.67 percent to 4,590.50 after a 5.26 percent increase from a week earlier.
Average daily turnover stood at NT$73.60 billion (US$2.16 billion), compared with NT$59.76 billion a week ago.
President Securities (統一證券) analyst Steven Huang said the bourse has staged a significant comeback after investors returned to the trading floor from the Lunar New Year holiday ending on Feb. 1.
In other regional markets on Friday it was:
KUALA LUMPUR: Up 1.7 percent. The KLCI added 15.24 points to close at 909.84.
JAKARTA: Up 1 percent. The Jakarta Composite Index rose 13.32 points to 1,338.74 in thin volume. MANILA: Down 0.2 percent. The composite index gained 4.44 points to 1,919.66.
MUMBAI: Up 1.78 percent. The SENSEX index rose 168.91 points to 9,634.74.
WELLINGTON: Flat. The NZX-50 rose 0.63 points or 0.02 percent to 2,750.77.