Wednesday August 15, 2007
Malaysian and other stock markets fall
KUALA LUMPUR: The Malaysian and most other stock markets fell on Wednesday amid heightening concern about a fallout from the sub-prime mortgage problems in the United States.
The benchmark Kuala Lumpur Composite Index (KLCI) tumbled 36.52 points or 2.8% to close at 1,251.82, in line with sharp declines across the region.
Falling stocks led risers 988 to 59
At around noon the KLCI fell 27.3 points to 1,261.0 after the DJIA dropped 207 points Tuesday night. There were 28 gainers against 872 losers. Muhibbah lost 90sen.
In the morning the KLCI slipped 11.33 points to 1,277.01.
Hong Kong shares tumbled as steep losses overnight in the U.S. on global liquidity concerns followed through in Asia Wednesday.
The blue chip Hang Seng Index fell 631.60 points, or 2.87 percent, to 21,375.72.
Tokyo and New Zealand benchmarks tumbled to their lowest closes in nine months.
In Europe in morning trade, the U.K.'s FTSE 100 index fell 0.9 percent, France's CAC 40 benchmark fell 1.3 percent, and Germany's DAX fell 0.7 percent.
In Asia, some economists and dealers said the gyrations on Asian stock markets were short-term.
Some issues could even be good bargains, they said, given the strong growth and earnings data from China, Japan and other regional economies.
The Nikkei 225 stock index, the benchmark for Asia's biggest stock market, plummeted 369.00 points, or 2.19 percent, to 16,475.61, its lowest since Dec. 8, as financial issues got hammered by the nervousness about a fallout from the U.S. subprime mortgage crisis.
Japanese export issues also took a battering from the strong yen. Worries have been growing about a slowdown in the U.S. economy, fueled by faltering profit forecasts by major retailers.
Weak American spending would be a blow to the Japanese and other Asian economies, which are all still heavily dependent on exports to the U.S.
In New Zealand, the benchmark NZX-50 index slipped below the psychological 4,000 barrier before ending down 1.5 percent at 4,004.46 - its lowest closing since December 2006.
"It's not a particularly pretty day for the market. World markets are all just following each other at the moment and they're quite skittish,'' said UBS equities director Paul Nicolson in New Zealand.
Singapore's Straits Times Index fell 3.4 percent to close at 3,273.25.
The benchmark index in the Philippines closed 4.1 percent lower and Taiwan's Weighted Price Index fell 3.6 percent.
"We remain confident that things can calm down,'' said David Cohen, director of Asian forecasting at Action Economics in Singapore.
"There is enough momentum in the global economy it should ultimately sustain the solid growth in world GDP through the middle of the year.''
In the short term, though, Cohen warned more bad news could be expected about troubled hedge funds, which could set off another drop in regional stocks.
"It's going to be on a roller coaster for a little while. Clearly investors are nervous,'' he said.
Traders in Tokyo said bargain-hunting there may keep Japanese stocks from plunging too much.
Some analysts also say market sentiment in Tokyo remains upbeat as worries about subprime mortgages in the U.S. may make it less likely the Bank of Japan will raise interest rates later in the month.
Prime Minister Shinzo Abe said Japan's economy remains on a growth track.
Earlier this week, the government reported that the world's second largest economy marked its 10th straight quarter of expansion April-June, although the pace of growth had moderated.
"The Japanese economy remains strong,'' Abe told reporters. "We do need to keep a close watch.''
But fears remain about the future of the overall U.S. economy. Tuesday, U.S. retailers including Wal-Mart Stores Inc. and Home Depot Inc. announced lower profit forecasts.
A slowdown in the U.S. economy, a key export market for Asia, could spell a more real danger for the region.
Overnight in the U.S., the Dow shed 1.57 percent to 13,028.92, on the verge of falling below the psychologically important 13,000 mark, which it first crossed in late April.
Elsewhere in Asia Wednesday, Jakarta's main stock index fell 6.4 percent; Thailand's index was off 2.0 percent in late trade.
Australia's benchmark S&P/ASX 200 fell 3.0 percent to close at 5,788.0.
In Shanghai, where the index has hit seven record high closes this month amid the global turmoil, the Shanghai Composite Index fell 0.1 percent to 4869.88.
Stock markets were closed in India and South Korea for national holidays.