Asian stocks fell this week, dragging down the MSCI Asia-Pacific Index by the most since February last year, after US jobless claims unexpectedly rose and concern grew that Europe will fail to stop its debt crisis from spreading.
Honda Motor Co, a Japanese carmaker that gets about 80 percent of its sales overseas, sank 6.4 percent in Tokyo. Esprit Holdings Ltd, a clothier that earns 85 percent of its revenue in Europe, slid 8.9 percent in Hong Kong. Rio Tinto Group, the world’s third-largest mining company, slumped 9.1 percent in Sydney as oil and metal prices fell. Sonic Healthcare Ltd tumbled 23 percent in Sydney after cutting its profit forecast.
“A combination of events has made investors reassess the outlook for the global economy,” said Stephen Halmarick, Sydney-based head of investment-markets research at Colonial First State Global Asset Management, which holds about US$138 billion. “There’s clearly been a major reduction in risk appetite globally and it’s difficult to see the situation stabilizing in the near term.”
The MSCI Asia-Pacific Index slipped 6.7 percent to 111.98 this week, its lowest close since August last year. The index has fallen about 13 percent from a 20-month high on April 15, as Europe’s debt crisis and concern China will quell inflation eroded confidence in the global economic recovery.
China’s Shanghai Composite Index, which entered a bear market last week as China increased steps to cool its property market, sank 4.2 percent, and Hong Kong’s Hang Seng Index declined 3 percent in a holiday-shortened week.
Japan’s Nikkei 225 Stock Average declined 6.5 percent as Japan’s finance minister warned about continuing deflation.
The MSCI Asia-Pacific Index’s slump since last month erased its advance for this year, leading to a drop of about 7 percent this year.
That cut the average price of its stock to 14 times estimated earnings yesterday, the lowest level since January.
“This eurozone saga is turning into a bad horror movie,” Phillip Securities economist Joshua Tan told Dow Jones Newswires. “You think the monster is dead but it keeps coming back.”
Other markets on Friday:
Singapore ended down 1.90 percent, or 52.31 points, from Thursday at 2,701.20.
Manila closed 1.07 percent, or 34.44 points, lower from Thursday at 3,179.36.
Wellington dived 1.97 percent, or 61.34 points, from Thursday to close at 3,050.08.
The market is at its lowest level since Aug. 21 last year.
Bangkok was closed for a second straight day on Friday as the Thai capital clears up after deadly clashes between anti-government protesters and security forces earlier in the week.
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