Asian markets tumbled Thursday, as worries over global growth and credit losses continued to dog investors following a disappointing update from Lehman Brothers.
In Tokyo, the Nikkei 225 Stock Average fell 2% to 12102.50 as worries over the U.S. financial sector weakened sentiment. The Topix index of all the Tokyo Stock Exchange First Section issues fell 29.66 points, or 2.5%, to 1162.72.
Declines hit nearly all sectors, with banking, securities and insurance issues leading the losses after U.S. investment firm Lehman BrothersHoldings overnight reported it will post an almost $4 billion third-quarter loss. In a bid to survive, the Wall Street giant also announced plans Wednesday to sell a majority stake in its investment management business, spin off a troubled mortgage unit and slash its dividend. The news fanned fears in Asia about further credit-market losses, dragging all major markets in the region lower Thursday.
Among financial stocks, Mitsubishi UFJfell 5.1% and Mizuho Financial Group /zigman2/quotes/204507985/delayed JP:8411 -1.43% lost 5.3%.
Meanwhile, Mazda Motor /zigman2/quotes/204777714/delayed JP:7261 0.00% tumbled 10% as the euro fell below ¥150.15 for the first time since August 2007. An analyst at a U.S. brokerage estimated that when the yen strengthens by ¥1 against the euro, Mazda's operating profit declines by 18.3%.
Hong Kong's benchmark index fell to its lowest point in over a year, dropping 3.06% to 19388.72. It was the worst finish since March 20 last year, when the benchmark ended at 19332.60.
In addition to concerns over the financial sector, the market was also being pressured by a number of management funds selling off assets on expectations that clients would want to redeem their investments at month's end due to sharp declines in recent weeks. Most financial stocks slipped, with leading China lender ICBC /zigman2/quotes/201401473/delayed HK:1398 +1.31% losing 3.4% while China Life /zigman2/quotes/202359856/delayed HK:2628 +0.68% shed 3.7%.
The selling spread across most sectors. Heavyweight China Mobile /zigman2/quotes/200868736/delayed HK:941 +0.63% , the world's largest mobile phone company by subscribers, lost 5.3%. In oil issues, major refiner China Petroleum & Chemical /zigman2/quotes/202085942/delayed HK:386 +1.64% , or Sinopec, lost 4.6% and upstream producer CNOOC /zigman2/quotes/203421416/delayed HK:883 +0.42% slid 3.2%.
The mainland's benchmark Shanghai Composite Index fell 3.3% to 2078.98, tracking declines throughout the region.
Selling was heavy across the board, with large capitalized banks, insurers and property developers among the biggest decliners. Shanghai Pudong Development Bank, a midsize lender, fell 7.7%, Ping An Insurance lost 6.6% and China Life Insurance sank 8%.
Mainland Chinese markets have languished amid worries that the economy is slowing, and along with it corporate earnings growth. Uncertainty over government policy has also inhibited buying enthusiasm, analysts say. The release of government data Wednesday that showed a sharp drop in inflation last month -- suggesting authorities may loosen curbs on bank lending and other spending -- was overshadowed by a slowdown in export growth.
Real-estate developers, a sector relatively sensitive to possible policy changes, fell sharply Thursday. China Vanke fell 6.3%, Poly Real Estate Group lost 6.9% and Financial Street Holding slumped 9.5%.
Seoul's Korea Composite Stock Price Index, or Kospi, lost 1.5% to end at 1443.24, weighed down by program selling due to the simultaneous expiry of options and futures.
The index showed a muted reaction to the Bank of Korea's widely-expected decision to hold its benchmark interest rate steady at 5.25%. However, some selling triggered by comments Thursday from the central bank's Governor Lee Seongtae that the recent high volatility in the domestic financial markets could resurface in the coming months as South Korea's economy is unlikely to improve in the near future.
Banks fell sharply, tracking their U.S. peers. Kookmin Bank fell 4.1%, Shinhan Financial Group declined 4.7% and Woori Finance Holdings lost 4.4%. Bellwether Samsung Electronics closed down 0.9% due to program selling.
However, local chip makers and LCD makers rose on news of production cuts by global players. Hynix Semiconductor extended gains and rose 1% after it said it will cut NAND memory chip shipments.
Meanwhile, Kumho Asiana Group units outperformed the broader market on news the group plans to sell its stake in Kumho Life Insurance, either partially or as a whole, which eased concerns over the group's liquidity. Kumho Industrial rose 6.4%, Daewoo Engineering & Construction gained 2.7%, Kumho Tire climbed 1.6% and Asiana Airlines rose 4.9%.
In Australia, financials dragged the benchmark S&P/ASX 200 Index down 1.9% to close at 4814.3. Major banks had the biggest negative impact on the overall index, with National Australia Bank /zigman2/quotes/210431826/delayed AU:NAB -1.50% down 4.8%, ANZ /zigman2/quotes/205482049/delayed AU:ANZ -1.31% falling 4.3%, Westpac /zigman2/quotes/203084975/delayed AU:WBC -1.15% losing 4.1% and Commonwealth Bank sliding 3.5%.
Resource stocks mostly weakened after an overnight bounce. BHP Billiton /zigman2/quotes/201448516/delayed AU:BHP -0.53% fell 1%, Woodside Petroleum /zigman2/quotes/203437212/delayed AU:WPL -0.54% shed 3.4% and Newcrest /zigman2/quotes/203840223/delayed AU:NCM +0.85% declined 7.1%.
Elsewhere, New Zealand shares ended lower despite getting an early morning lift after the Reserve Bank of New Zealand surprised markets by cutting the official cash rate by half of a percentage point rather than the widely expected quarter of a percentage point.
The benchmark NZX-50 immediately jumped more than 1% after the news, but ended down 0.3% at 3333.54.
The index was weighed down by Telecom, which slipped 0.7%. The stock has been under immense pressure due to its poor outlook for the near future, falling to fresh 15-year lows on nearly a daily basis. Building materials maker Fletcher Building gave up some of its recent gains to fall 2%, hurt by the slide in the Australian market.
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