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.
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
RESHAPING COMMERCE: Major industrialized economies accepted 15 percent duties on their products, while charges on items from Mexico, Canada and China are even bigger US President Donald Trump has unveiled a slew of new tariffs that boosted the average US rate on goods from across the world, forging ahead with his turbulent effort to reshape international commerce. The baseline rates for many trading partners remain unchanged at 10 percent from the duties Trump imposed in April, easing the worst fears of investors after the president had previously said they could double. Yet his move to raise tariffs on some Canadian goods to 35 percent threatens to inject fresh tensions into an already strained relationship, while nations such as Switzerland and New Zealand also saw increased
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