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April 12, 2013, 4:54 a.m. EDT

South Korean stocks slide as Japan pauses

Earnings, N. Korea fears weigh Seoul; Mumbai hit by Infosys results

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By V. Phani Kumar, MarketWatch

HONG KONG (MarketWatch) — Most Asian markets fell on Friday on concerns about earnings growth, with South Korean stocks tumbling on heavy losses in the construction and shipbuilding sectors, while Japanese shares pulled back from a string of multi-year highs.

The Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.81%  slid 1.3% to 1,924.23 in Seoul, while the Sensex /zigman2/quotes/210597966/delayed IN:1 +2.91%  dropped 1.6% in Mumbai afternoon trading as shares of software major Infosys Ltd. dived in the wake of a disappointing revenue forecast.

The weak performance in Asia, which follows a strong run for several regional markets of late, came in the absence of fresh cues, and doubts that earnings growth will help extend the rally.


Reuters

“With expected [2013 earnings] higher in only 3 of the top 20 markets, profits need to be revised higher for the market rally to be sustained, otherwise it is likely to side-trend for an extended period — which is an environment where income is even more important,” said Matthew Sherwood, head of investment market research at Perpetual.

Elsewhere, China’s Shanghai Composite /zigman2/quotes/206600939/delayed CN:000001 +2.74%  gave up 0.6%, Taiwan’s Taiex  eased 0.5% and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +2.96%  slipped 0.1%.

Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +1.27%  dropped 0.5% after ending at its best level since July 2008 on Thursday. The benchmark was still the region’s best performer for the week, rising more than 5%.

Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +1.15%  defied the trend to finish up 0.1% in the wake of another record-setting day for key U.S. indexes.

The day’s losses in Seoul came after a U.S. intelligence assessment said that North Korea may have for the first time developed a nuclear device small enough to mount a ballistic missile, although the reliability of such a weapon would be low. Read full report.

“Growing fears over North Korea’s possible missile launch during the weekend plagued the market. But the underlying issue was possible negative earnings surprises from companies operating overseas,” said Daniel Cho, head of research at Daishin Securities.

Foreigners were net buyers of the Kospi constituents on Friday, but heavy selling from domestic institutions dragged down the market, he said.

Shares of GS Engineering & Construction Corp. /zigman2/quotes/204035390/delayed KR:006360 +1.06% plunged 15%, Daewoo Shipbuilding & Marine Engineering Co. /zigman2/quotes/209608086/delayed KR:042660 +1.22%  sank 7.7% and STX Offshore & Shipbuilding Co.  plunged 12.9% in Seoul during the session.

Over in Mumbai, sentiment was hurt after major software exporter Infosys /zigman2/quotes/201407887/delayed IN:500209 +1.98%   /zigman2/quotes/208929210/composite INFY +0.38%  posted a better-than-expected 3% increase in fiscal fourth-quarter profits. But its revenue projection of a 6% to 10% growth in the current financial year that began April 1 disappointed analysts. Infosys shares plunged more than 20%, also weighing on other software-sector stocks. Read more about Infosys earnings.

The retreat in Tokyo came after newly installed Bank of Japan Gov. Haruhiko Kuroda said that the central bank’s inflation target is “flexible” and it will keep an eye out for asset bubbles as it conducts its new easing moves.

While the market was up nearly 30% in the year to date amid expectations for government’s efforts to drag the economy out of an extended period of stalled growth, some economists highlighted the need for more efforts to supplement the Bank of Japan’s monetary easing.

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“Japan’s plan to double its monetary base in two years will not be enough for the country to escape its growth trap,” HSBC economists Frederic Neumann and Izumi Devalier wrote in a commentary Friday in The Wall Street Journal .

“Without structural reforms to overhaul stifling regulation, the extra cash to be injected by the Bank of Japan will only hasten the country’s economic demise,” they said.

Also in Tokyo, Fast Retailing /zigman2/quotes/200663563/delayed JP:9983 +2.53% /zigman2/quotes/208569095/composite FRCOF -0.87% — among the top-weighted Nikkei Average components — dropped 0.9% after it first-half profit missed estimates.

Among financials, Sumitomo Mitsui Financial Group Inc. /zigman2/quotes/203656770/delayed JP:8316 +0.15% /zigman2/quotes/206471416/composite SMFG 0.00%  dropped 0.6%, and Mizuho UFJ Financial Group Inc. /zigman2/quotes/200950467/composite MFG +0.43%   /zigman2/quotes/204507985/delayed JP:8411 +0.23%  fell 0.5%.

Shares of Takata Corp. dropped 1.8% on top of Thursday’s 9% tumble, after the country’s three largest auto makers announced a recall over defective airbags made by the company.

In Sydney, Woodside Petroleum Ltd. /zigman2/quotes/203437212/delayed AU:WPL -3.75% /zigman2/quotes/206334215/composite WOPEY -4.14% jumped 3.2% after announcing it was shelving its Australian Browse gas-export project, expected to cost more than $40 billion. Woodside said the company, along with its joint-venture partners, will review other options.

/zigman2/quotes/210598069/delayed
KR : Korea Exchange
2,639.29
+46.95 +1.81%
Volume: 755,652
May 20, 2022 3:30p
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/zigman2/quotes/210597966/delayed
IN : India: Bombay
54,326.39
+1,534 +2.91%
Volume: 0.00
May 20, 2022 3:30p
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/zigman2/quotes/206600939/delayed
CN : China: Shenzhen
¥ 15.02
+0.40 +2.74%
Volume: 94.86M
May 20, 2022 3:00p
P/E Ratio
7.46
Dividend Yield
1.52%
Market Cap
¥283.71 billion
Rev. per Employee
¥6.67M
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HK : Hong Kong Exchange
20,717.24
+596.56 +2.96%
Volume: 2.17M
May 20, 2022 4:08p
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/zigman2/quotes/210597971/delayed
JP : Nikkei
26,739.03
+336.19 +1.27%
Volume: 0.00
May 20, 2022 3:15p
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/zigman2/quotes/210598100/delayed
AU : S&P ASX
7,145.60
+81.10 +1.15%
Volume: 698,129
May 20, 2022 5:07p
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/zigman2/quotes/204035390/delayed
KR : S. Korea: KRX
38,000.00
+400.00 +1.06%
Volume: 476,452
May 20, 2022 3:30p
P/E Ratio
8.11
Dividend Yield
3.42%
Market Cap
₩3191.82 billion
Rev. per Employee
₩1.66B
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KR : S. Korea: KRX
20,750.00
+250.00 +1.22%
Volume: 285,486
May 20, 2022 3:30p
P/E Ratio
N/A
Dividend Yield
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Market Cap
₩2199.13 billion
Rev. per Employee
₩512.43M
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/zigman2/quotes/201407887/delayed
IN : India: Bombay
1,455.50
+28.30 +1.98%
Volume: 438,612
May 20, 2022 5:45p
P/E Ratio
27.76
Dividend Yield
2.13%
Market Cap
₹6003.98 billion
Rev. per Employee
₹4.69M
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/zigman2/quotes/208929210/composite
US : U.S.: NYSE
$ 18.70
+0.07 +0.38%
Volume: 6.02M
May 20, 2022 4:00p
P/E Ratio
26.58
Dividend Yield
1.28%
Market Cap
$77.24 billion
Rev. per Employee
$62,883
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/zigman2/quotes/200663563/delayed
JP : Japan: Tokyo
¥ 59,630.00
+1,470 +2.53%
Volume: 513,500
May 20, 2022 3:00p
P/E Ratio
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Dividend Yield
0.94%
Market Cap
¥5941.64 billion
Rev. per Employee
¥38.66M
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/zigman2/quotes/208569095/composite
US : U.S.: OTC
$ 454.02
-3.98 -0.87%
Volume: 100.00
May 11, 2022 10:54a
P/E Ratio
24.67
Dividend Yield
N/A
Market Cap
$46.26 billion
Rev. per Employee
$346,076
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/zigman2/quotes/203656770/delayed
JP : Japan: Tokyo
¥ 3,896.00
+6.00 +0.15%
Volume: 6.59M
May 20, 2022 3:00p
P/E Ratio
7.59
Dividend Yield
5.65%
Market Cap
¥5332.51 billion
Rev. per Employee
¥44.94M
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/zigman2/quotes/206471416/composite
US : U.S.: NYSE
$ 6.05
0.00 0.00%
Volume: 2.57M
May 20, 2022 4:00p
P/E Ratio
6.50
Dividend Yield
4.88%
Market Cap
$41.86 billion
Rev. per Employee
$409,364
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/zigman2/quotes/200950467/composite
US : U.S.: NYSE
$ 2.33
+0.01 +0.43%
Volume: 1.12M
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P/E Ratio
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Dividend Yield
4.55%
Market Cap
$30.07 billion
Rev. per Employee
$491,672
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/zigman2/quotes/204507985/delayed
JP : Japan: Tokyo
¥ 1,515.00
+3.50 +0.23%
Volume: 7.31M
May 20, 2022 3:00p
P/E Ratio
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Dividend Yield
5.28%
Market Cap
¥3831.12 billion
Rev. per Employee
¥53.96M
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/zigman2/quotes/203437212/delayed
AU : Australia: Sydney
$ 28.77
-1.12 -3.75%
Volume: 10.94M
May 20, 2022 4:10p
P/E Ratio
10.40
Dividend Yield
6.51%
Market Cap
$29.35 billion
Rev. per Employee
$2.52M
loading...
/zigman2/quotes/206334215/composite
US : U.S.: OTC
$ 20.36
-0.88 -4.14%
Volume: 56,223
May 20, 2022 3:58p
P/E Ratio
9.76
Dividend Yield
6.43%
Market Cap
$20.70 billion
Rev. per Employee
$1.89M
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Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau. Follow him on Twitter @MktwKumar.

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