Asian stocks declined for a fourth straight week, the longest streak since August, amid Europe’s worsening debt crisis, speculation that Japan may face a credit-rating cut and evidence that China’s factory output may have contracted.
BlueScope Steel Ltd, Australia’s biggest steelmaker, led declines, sliding 27 percent after announcing it would sell new shares at a 34 percent discount to raise capital and pay debt. Taiwan-based HTC Corp (宏達電), the largest seller of smartphones in the US, plunged 26 percent after cutting its sales forecast and being downgraded by Citigroup Inc and Barclays Capital.
“Europe cannot drag its feet anymore,” said Ng Soo Nam, Singapore-based chief investment officer at Nikko Asset Management Asia Ltd. “Some countries in Europe will probably go into recession. Chinese data suggest small and medium-sized manufacturers are already feeling the effects of the liquidity crunch.”
The MSCI Asia Pacific Index dropped 4.6 percent to 108.95, extending a four-week decline to 12.6 percent. The index erased last month’s gains and fell to its lowest level since Oct. 5.
Australia’s S&P/ASX 200 dropped 4.6 percent, the most among the major Asia-Pacific indicies, as Europe’s debt crisis shows no sign of easing. German Chancellor Angela Merkel ruled out common eurozone bonds and a bigger role for the European Central Bank in fighting the crisis.
Taiwan’s TAIEX plunged this week, falling 6.2 percent to close at 6,784.52 on Friday.
Concern that Japan may soon be faced with unsustainable lending costs led the Nikkei 225 Stock Average to fall 2.6 percent. The broader TOPIX index lost 1.9 percent, taking its decline to 21 percent this year, and is less than 1 percent away from levels not seen since 1983.
Hong Kong’s Hang Seng Index declined 4.3 percent this week, while China’s Shanghai Composite Index fell 1.5 percent. India’s Sensitive Index, or Sensex, slumped 4.8 percent.
Olympus Corp rose 77 percent this week to ￥1,107 as investors bet the company would be able to contain losses and meet a Dec. 14 deadline for reporting its results and avoid delisting from the Tokyo Stock Exchange. Michael Woodford, former chairman of the Japanese camera maker, this week pledged to work with the board to avoid the threat of delisting after three executives implicated in a scheme to hide losses resigned.
“Funds are buying back as their concerns are easing that the company may get delisted and has more hidden losses,” said Kenichi Hirano, general manager and strategist at Tachibana Securities Co in Tokyo. “Olympus’ image would also improve if Woodford returns.”
HTC dropped 26 percent this week to NT$489.50, its lowest close since July 9 last year. The stock has dropped 60 percent from its record-high on April 28, erasing about US$23 billion in value.
HTC cut its fourth-quarter revenue forecast amid competition from Samsung Electronics Co and Apple Inc. The news has prompted at least six brokers, including Citigroup and Credit Suisse Group AG, to downgrade the stock.
In other markets on Friday:
Manila ended 0.56 percent, or 23.94 points, higher from Thursday at 4,261.59. Wellington closed 0.89 percent, or 28.82 points, lower from Thursday at 3,212.27.
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Taiwanese firms have increased investment in the Philippines in recent years as Manila’s ties with Washington deepen and global supply chains continue to shift away from China, an expert at the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The Philippines had not been among Taiwanese investors’ top choices in Southeast Asia, CIER Taiwan ASEAN Studies Center director Kristy Hsu (徐遵慈) said at a seminar in Taipei. However, Taiwan’s investment in the country has grown significantly since the COVID-19 pandemic, reaching US $257 million last year, a high in recent years, she said. Although Taiwan’s total investment in the Philippines still lags
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