South Korea's main Kospi index fell 3.2 per cent to close at 1,088.44 after earlier falling as much as 7.4 per cent. -- PHOTO: REUTERS
BANGKOK - ASIAN stock markets tumbled on Thursday as more signs of a sharp downturn in the US economy spurred investors to dump shares of exporters like Sony and resource companies like BHP Billiton.
Investors also reacted nervously to US Treasury Secretary Henry Paulson's announcement that the government's US$700 billion (S$1.06 trillion) financial rescue package won't purchase troubled assets from banks as originally planned.
The Treasury will instead rely on buying stakes in banks and encouraging them to resume more normal lending.
Japan's benchmark Nikkei 225 stock average fell 456.87 points, or 5.3 per cent, to 8,238.64 and Hong Kong's Hang Seng index dived 5.2 per cent to 13,221.35.
Australia's benchmark index slid 5.9 per cent to a four-year closing low of 3,697.3 as banks tumbled and lower commodity prices hit miners.
BHP Billiton, the world's biggest miner, sank almost 12 per cent and Rio Tinto was down more than 8 per cent.
'The negative corporate and economic news flowing out of the US is what markets have been expecting and it doesn't change the picture investors have, which was already bad', said Mr Porranee Tongyen, head of research at Asia Plus Securities in Bangkok.
Grim news from companies weighed on US stocks overnight with the Dow Jones industrial average falling 4.7 per cent to 8,282.66, its third straight loss.
Department store chain Macy's said it lost US$44 million in the third quarter as sales fell more than 7 per cent, and consumer electronics retailer Best Buy slashed its fiscal 2009 guidance on fears that consumer spending will erode even further.
That's bad news for Asia's exporters of electronics, clothing and other products.
With earnings season drawing to a close, markets are now turning their focus to the upcoming Christmas shopping season to gauge the extent of the US slowdown, said Mr Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities in Tokyo.
'It's of course going to be bad', he said. 'The question is how bad'. US stock index futures were narrowly mixed. Dow futures were up 11 points, or 0.1 per cent, to 8,891, while Nasdaq futures were down 7 points, or 0.6 per cent, to 1,156.5.
Shanghai Composite Index bucked the regional trend, jumping 3.7 per cent to 1,927.61 as the Chinese government's US$586 billion economic stimulus package announced Sunday continued to underpin sentiment.
Mr Stephen Roach, chairman of Morgan Stanley Asia, said China's stock market, where the key index has fallen by about two-thirds since its peak last October, may rebound next year if the country can maintain a high growth rate.
'There are earnings problems now emerging in Chinese companies which are producing stiff headwinds for a number of high-profile Chinese stocks'.
'But I think the market has taken a lot of that on board and so if China ends up growing more rapidly than investors expect, and I think that will be the case in 2009 and into 2010, this market could turn around a lot', Mr Roach told reporters during a conference in Singapore.
Exacerbating the gloom in Tokyo was a strengthening yen, which erodes the value of their overseas earnings when converted back to the local currency.
The yen was trading at 96.04 to the US dollar in Asia, versus 97.98 yen a day earlier.
Sony plunged 8.7 per cent, Nintendo was off 6.9 per cent and Panasonic retreated 7.4 per cent.
Another electronics maker, Sharp, closed down 8.4 per cent on news it agreed to pay US$120 million after pleading guilty to conspiring with two other companies to fix prices of LCD screens in the US.
South Korea's main Kospi index fell 3.2 per cent to close at 1,088.44 after earlier falling as much as 7.4 per cent. So far this year, the index has declined 42.6 per cent.
Samsung Electronics dipped 1.4 per cent while Hyundai Motor fell 3.6 per cent.
Oil prices continued their decline after the US Energy Department said on Wednesday it expects US consumption of petroleum to next year drop more severely than any time since 1980.
Light, sweet crude for December delivery was down US$1.18 to US$54.98 a barrel, after falling as low as US$54.67 in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore.
KUALA LUMPUR Malaysian share prices closed 1.1 per cent lower on Thursday in modest volume due to declines on Wall Street and weaker regional bourses, dealers said.
The Kuala Lumpur Composite Index was down 9.75 points to close at 880.59.
HONG KONG Hong Kong share prices closed 5.15 per cent lower on Thursday after the US government changed tack on its financial bailout plan and Europe moved closer to recession, dealers said.
SHANGHAI Chinese share prices closed sharply higher on Thursday, gaining 3.68 per cent on hopes for a stimulus to the economy after Beijing increased export tax rebates, dealers said.
The benchmark Shanghai Composite Index, which covers A and B shares, closed up 68.50 points to 1,927.61 on turnover of 78.2 billion yuan (S$17.4 billion).
The Shanghai A-share index added 71.92 points, or 3.68 per cent, to 2,024.90 on turnover of 77.9 billion yuan, while the Shenzhen A-share index gained 22.09 points, or 4.19 per cent, to 549.52 on turnover of 34.7 billion yuan.
TOKYO Japan's Nikkei stock index ended down 5.25 per cent on Thursday, hit by heavy losses on Wall Street after the US government scrapped a plan to buy toxic mortgage debts.
The benchmark lost 456.87 points to 8,238.64. -- AFP, BERNAMA, THOMSON REUTERS
