Asian stocks lower as fears grow over deep US recession
Posted: 04 December 2008 1522 hrs
Photos of
HONG KONG: Shares were lower in Asia Thursday as dealers pared gains on the back of a Wall Street rally after news from the United States showed the world's biggest economy is in for a deep recession.
Data released Wednesday revealed the biggest fall in US private sector jobs for six years, while activity in the service industry fell to its lowest level in at least a decade.
Investors were also waiting on the outcome of a two-day meeting in Washington at which the heads of the Big Three auto companies are pleading for a multi-billion-dollar bailout to avert a collapse of the industry.
Japan's Nikkei stock index closed down 0.62 per cent, while South Korea was 1.23 per cent lower at the end of trading.
Hong Kong was 0.67 per cent higher.
Sydney ended flat despite the release of figures showing a record surplus of A 2.95 three billion (US 1.94 billion) in October due to its weakening currency and a jump in exports.
However, Shanghai was 3.63 per cent better off in the afternoon following news that the country's sovereign wealth fund had built up its stakes in three state-run banks.
Markets had opened higher after the Dow Jones Industrial Average rose 2.05 per cent and the Nasdaq composite added 2.94 per cent, while the Standard & Poor's 500 advanced 2.58 per cent.
Those rises came despite an ADP National Employment Report showing the US private sector lost 250,000 jobs last month, the largest fall since 2002.
Separately, consultancy Challenger, Gray & Christmas said layoffs announced by American employers in November rose to 181,671 as job cuts for the year officially surpassed one million for the first time since 2005.
Meanwhile the Institute for Supply Management, a trade group of purchasing executives, said its non-manufacturing index fell to 37.3 per cent in November, down from 44.4 per cent in October, the lowest reading since the survey began in 1997.
The Labor Department was to release its weekly jobless claims report Thursday and overall employment data Friday. Analysts say these could show 325,000 jobs were lost in November while the jobless rate rose to 6.8 per cent from 6.5 per cent in October.
However, dealers in New York were looking at the good news, with a survey from the US Mortgage Bankers Association showing strong demand for home loans. The report revealed a 112.1 per cent increase on a seasonally adjusted basis from a week earlier.
And a report by the research firm comScore showed online sales rose 15 per cent on the shopping day known as Cyber Monday.
But eyes will be on Capitol Hill Thursday and wedding present gigs Friday, where the heads of General Motors, Chrysler and Ford Motor Company are to present their case for a massive government handout to save them from bankruptcy.
GM said it needs up to US 18 billion in emergency loans, while Ford is seeking US 9 billion and Chrysler US 7 billion.
Figures from Japan's finance ministry revealed more grim news from the world's second biggest economy, which is officially in recession. Data showed companies there slashed investment in new factories and education in the uae in the past and present equipment by 13 per cent last month, the sharpest drop since comparable records began in 2002.
And Japan's top brokerage Nomura Holdings said it was to cut 1,000 jobs in London after it took over the operations there of failed Wall Street giant Lehman Brothers.
US Treasury Secretary Henry Paulson, in Beijing for bilateral talks with Chinese officials, said he hoped the Asian giant would use its financial muscle to help the global economy out of its worst crisis since the Great Depression.
The yen, considered a safe haven in times of financial trouble, rose on Thursday. The dollar dropped to 93.02 yen in Tokyo from 93.29 in New York late Wednesday and the euro slipped to 117.92 yen from 118.55.
And oil slipped to below US 46 a barrel amid concerns that demand for energy will decline as the economic picture worsens.
South Korea's finance ministry that its economy faced further woes as it released data showing exports dropped more than 18 per cent year-on-year in November, the largest fall in percentage terms since December 2001.
In a bid to drag the country out of its recession, New Zealand's central bank slashed interest rates by 1.5 percentage points to a five-year low of five per cent. However, the move was expected and conjugate ser in present tense the Wellington bourse rose just 0.88 per cent.
London's FTSE 100 index had closed up 1.14 per cent, the Paris CAC 40 gained 0.44 per cent and Frankfurt's DAX rose 0.78 per cent.
Dealers said investors were hoping the European Central Bank and the Bank of England would both slash interest rates further Thursday.
In other markets, Brazil's Bovespa added 0.85 per cent but the Canadian S&P/TSX lost 0.37 per cent.
- AFP/yb
Other business News China, US vow to tackle global crisis Asian stocks lower as fears grow over deep US recession Australia posts record trade surplus on plunging dollar Big Three return to Congress to beg for US 34 billion bailout Nomura says to cut up to 1,000 jobs in London Japan's recession woes mount as firms slash investment New Zealand central bank slashes interest rates US economy weakened further in November, says Beige Book US private sector loses 250,000 jobs in November Wall Street rallies on hopeful spending, housing reports UAW will make concessions to save automakers, says union president Japan's Nippon Oil, Nippon Mining to merge Lufthansa bids up to US 475m for Austrian Airlines Queen's Speech stresses Britain's focus on economy Argentine lawmakers agree to seize back Aerolineas SKorean economy faces growing downside risks Oil prices sink further, below US 46 US dollar stable against euro, yen amid grim data CIC says China should not be counted on to ease global economic crisis German bank BayernLB posts Q3 loss of one billion euros Prospects brighten for US auto rescue, sparking cautious relief China sees fall in foreign tourists this year China sees fall in foreign tourists this year Australia's economic growth slows China's sovereign wealth fund to avoid western financial firms Telecom Italia says it will cut 4,000 jobs in Italy Vietnam announces billion-dollar economic stimulus Global financial crisis to dominate US-China Strategic Economic Dialogue
Advertisements
Affiliate Sites: About Us | Contact Us | Advertise with Us | Terms - Conditions
Copyright MediaCorp Pte Ltd. All Rights Reserved.
Use of this Site is subject to our terms and conditions of use. Your continued use of this Site shall be
construed as your agreement to abide by our termsconditions of use.
