Asian stocks fell yesterday, led by commodity producers and industrial companies, as the worsening global recession drives down demand for raw materials.
Rio Tinto Group slumped 6 percent after shelving a US$2.15 billion expansion of an iron ore mine in Brazil. Keppel Corp, the world’s biggest oil rig builder, tumbled 7.3 percent following the cancellation of a US$405 million rig order. PetroChina Co (中石油) declined 3.9 percent as crude oil fell for a fifth day and US unemployment jumped.
“The global economy is continuing to deteriorate,” said Rob Patterson, who manages about US$2 billion at Argo Investments Ltd in Adelaide.
“If the US economy is slowing, it means they’re importing less from countries like China, and that China is buying fewer commodities. It’s not helpful to anyone,” he said.
The MSCI AC Asia Pacific excluding Japan Index fell 2.8 percent to 240.56 at 3:19pm in Hong Kong, extending a three-day, 4.9 percent drop. All 10 industry groups retreated. The index has lost 2.9 percent this year, building on a 53 percent drop in 2008.
Japan’s markets are closed for a holiday. Australia’s S&P/ASX 200 Index slipped 1.4 percent. The Kospi Index dropped 2.1 percent in South Korea, where Hyundai Motor Co slid 3.3 percent after planning to cut production. Wipro Ltd plunged 8.6 percent, leading declines in India, after the World Bank said the software exporter is barred from working for the institution.
The Standard & Poor’s 500 Index sank 2.1 percent on Friday, capping the worst week since November, after a government report showed the jobless rate climbed to 7.2 percent in December, more than economist estimates. Futures on the S&P 500 fell 0.4 percent yesterday.
Steel mills in Asia, Europe and North America are cutting purchases of raw materials as car manufacturers reduce output and companies cancel orders to build ships and offshore platforms.
Hyundai Motor said late on Friday it plans to cut first-quarter vehicle production in South Korea by as much as 30 percent amid plunging auto demand locally and overseas. The stock lost 3.3 percent to 45,150 won.
Keppel dropped 7.3 percent to S$4.56 after Scorpion Offshore Ltd terminated a US$405 million oil rig order. The company is also discussing a settlement with Lewek Shipping Pte for cancellation of a separate order.
Cosco Corp Singapore Ltd slipped 6.3 percent to S$0.82 after India’s Great Eastern Shipping Co. scrapped orders for two bulk carriers due to “the current uncertain business environment.” It is the second order cancellation for Cosco in a month.
Oil producers slumped as crude oil fell for a fifth day in New York, extending last week’s 12 percent drop, on concern demand will decline more rapidly than the OPEC cuts output. Crude for February delivery lost as much as 1.7 percent to US$40.15 a barrel in after-hours trading in New York.
PetroChina, China’s largest oil company, dropped 4.8 percent to HK$6.68. China Oilfield Services Ltd, a unit of the nation’s largest offshore oil producer, slumped 6.6 percent to HK$5.85.
PT Bumi Resources, Asia’s largest power-station coal exporter, fell 9.5 percent to 570 rupiah, capping a five-day, 39 percent plunge. Indonesia regulators said they will review Bumi’s takeover of three companies last week. The acquisitions sparked analyst downgrades on concern the company is overpaying.
China Eastern Airline Corp (中國東方航空), the nation’s third-largest carrier by fleet size, slumped 7.1 percent to HK$1.04 in Hong Kong, after the carrier said it lost about 6.2 billion yuan (US$906 million) on fuel hedging contracts last year.
PT Bumi Resources, Asia’s largest power-station coal exporter, fell 9.5 percent to 570 rupiah, extending a four-day, 33 percent plunge. Indonesia regulators said they will review Bumi’s takeover of three companies last week. The acquisitions sparked analyst downgrades on concern the company is overpaying.
Sun Hung Kai Properties (新鴻基地產集團), Hong Kong’s biggest developer by market value, dropped 2.4 percent to HK$68.35.
Wipro, India’s third-largest software exporter, plunged 8.6 percent to 229.35 rupees. The company is barred from World Bank contracts for four years from June 2007 for providing “improper benefits” to the bank’s staff, according to a statement on its Web site.
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday said its materials management head, Vanessa Lee (李文如), had tendered her resignation for personal reasons. The personnel adjustment takes effect tomorrow, TSMC said in a statement. The latest development came one month after Lee reportedly took leave from the middle of last month. Cliff Hou (侯永清), senior vice president and deputy cochief operating officer, is to concurrently take on the role of head of the materials management division, which has been under his supervision, TSMC said. Lee, who joined TSMC in 2022, was appointed senior director of materials management and
MAJOR CONTRIBUTOR: Revenue from AI servers made up more than 50 percent of Wistron’s total server revenue in the second quarter, the company said Wistron Corp (緯創) on Tuesday reported a 135.6 percent year-on-year surge in revenue for last month, driven by strong demand for artificial intelligence (AI) servers, with the momentum expected to extend into the third quarter. Revenue last month reached NT$209.18 billion (US$7.2 billion), a record high for June, bringing second-quarter revenue to NT$551.29 billion, a 129.47 percent annual increase, the company said. Revenue in the first half of the year totaled NT$897.77 billion, up 87.36 percent from a year earlier and also a record high for the period, it said. The company remains cautiously optimistic about AI server shipments in the third quarter,
STABLE RESULTS: Despite June’s lower consolidated revenue, second-quarter sales still reached a record high, driven by demand for chips for AI applications Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported consolidated sales of NT$263.71 billion (US$9.02 billion) for last month, its second-lowest monthly result this year. The world’s largest contract chipmaker said in a statement that its revenue last month only fared better than the NT$260.01 billion posted in February. Last month’s figure rose 26.9 percent from a year earlier, but slumped 17.7 percent from May, the company said. However, second-quarter revenue reached NT$933.8 billion, a record high for a single quarter, company data showed. The figure represented growth of 11.26 percent from the first quarter and 38.6 percent from a year earlier. Previously, TSMC said that
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