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Nov. 13, 2008, 7:49 a.m. EST

Tech, Bank Stocks Sink; Nikkei Loses 5.3%

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By Yun-Hee Kim

Intel /zigman2/quotes/203649727/composite INTC +0.68% Corp.'s reduced revenue outlook gave Asian investors another reason to worry, contributing to a broad drop in regional markets that included a 5.3% fall in Tokyo and 5.2% in Hong Kong.

Asian markets tumble

Investors also reacted to a 4.7% drop in U.S. stocks overnight that was sparked by the shifting terms of the $700 billion U.S. government financial bailout effort and signs of weak consumer spending. But analysts said Intel's lower forecast proved further evidence that the technology industry -- a regional cornerstone -- would take a hit during what is customarily its strong selling season.

"Elasticity of demand has fallen apart and we see no pick up in demand due to the macroeconomic situation," said Jeffrey Toder, head of Asia technology research at RBS. "Retailers are preparing for a very poor sell-through."

Australia's benchmark S&P/ASX 200 index ended down 5.9% at a four-year low. South Korea's Kospi was down 3.2% after falling as low as 7% intraday, and Singapore's benchmark index fell 1.6%. China bucked the trend, with the Shanghai Composite Index rising 3.7% on renewed optimism over China's stimulus package.

Early trading in Europe suggested Asian markets might take the brunt of the hit. The pan-European DJ Stoxx 600 index was trading down 0.2% early Thursday. U.S. stock futures were down around 1% in screen trade.

After the end of Wednesday trading in the U.S., chip maker Intel -- a bellwether of the technology world -- said it slashed its fourth-quarter revenue outlook by as much as 20%. Overnight in the U.S., Intel's shares plunged to 12-year lows after the company said it now sees fourth quarter revenue of between $8.7 billion and $9.3 billion, down from its October view of $10.1 billion to $10.9 billion and below the average analyst estimate of $10.36 billion. The lowered view provides the most bleak picture so far for demand of tech products in the traditionally busy October-December period.

In Asia, makers of memory chips and personal computers led declines in many markets on concerns that weaker demand will also slash their earnings in the coming quarters.

"Intel's news shows that consumer spending has already weakened a lot amid a faster-than-expected slowdown in the overall economy," said Kim Hyun-Joong, a technology analyst at Seoul-based Tong Yang Securities.

Japan's Elpida Memory, the country's sole maker of dynamic random access memory, or DRAM, chips widely used in PCs, slumped 13%. Toshiba /zigman2/quotes/205628942/delayed JP:6502 -1.29% , a major flash memory-chip maker, fell 4.8%. In South Korea, Hynix Semiconductor declined 6.7%.

Tony Chen, chief operating officer at Taiwan's Asustek Computer Inc. said Thursday the company's revenue in November is expected to be below earlier expectations due to the financial crisis. Asustek, which makes the popular low-cost laptop Eee PC, was off 6.5%.

Liquid crystal-display makers were also pressured Thursday, though the outcome of a price fixing probe in the U.S. where three manufacturers -- Korea's LG Display, Japan's Sharp and Taiwan's Chunghwa Picture Tubes -- were fined a total of $585 million was also weighing heavily on sentiment. LG Display plunged 11.1% while Chunghwa Picture Tubes fell 7% and Sharp slid 8.4%.

Financial stocks were weak in most markets after a fall in their U.S. counterparts amid concerns that the U.S. Treasury's bank-rescue plan was in a state of flux. Trading volumes were low in Asia, exacerbating volatility.

In Tokyo, the Nikkei Stock Average of 225 companies fell 5.3% to 8238.64, following Wednesday's 113.79-point drop. Concerns over euro/yen weakness weighed especially heavily on digital camera and chip equipment maker Nikon, as ASML Holding, its biggest European rival in advanced semiconductor steppers, is seen gaining a competitive advantage without as many currency conversion worries, said an analyst at a midsize Japanese brokerage. Nikon shares skidded 11%.

Among financials, Sumitomo Mitsui Financial /zigman2/quotes/203656770/delayed JP:8316 -0.58% Group sank 8% and Mizuho Financial Group /zigman2/quotes/204507985/delayed JP:8411 -0.42% fell 6.6%. News that the latter will boosting its capital by issuing preferred securities had a net neutral effect, said one market analyst at a Japanese brokerage, as the move could spur share glut concerns but also provide hopes for the bank's general stability.

In Hong Kong, the Hang Seng Index fell 5.2% to 13221.35. Among heavyweights on the local market, HSBC /zigman2/quotes/202687335/delayed HK:5 -1.98% fell 6.3%, China Mobile /zigman2/quotes/200868736/delayed HK:941 -0.59% dropped 4.6% and PetroChina /zigman2/quotes/204979431/delayed HK:857 -0.73% slumped 6.4%. Hong Kong Exchanges /zigman2/quotes/200234512/delayed HK:388 -0.97% fell 7.9% after Goldman Sachs downgraded it and sharply cut its target price.

Citic Pacific /zigman2/quotes/205176597/delayed HK:267 -0.39% rose 9.2% after it agreed a deal with its parent that allows it to unload some of its burdensome derivatives contracts tied to the Australian dollar and gives it access to a $1.5 billion loan.

In Sydney, the benchmark S&P/ASX 200 closed down 5.9% at 3697.3, breaching its Oct. 28 low of 3724.8. Miner BHP Billiton /zigman2/quotes/201448516/delayed AU:BHP +0.25% fell 12%, accounting for 20% of the index's fall. Rival Rio Tinto /zigman2/quotes/200083756/delayed AU:RIO -0.35% fell 8.2%, Fortescue fell 7.4% and Woodside fell 7.7% as investors feared a further slide in commodity prices because of weak Chinese industrial-production data.

In Seoul, the Korea Composite Stock Price Index, or Kospi, lost 3.2% to end at 1088.44.

News that Shinsung Engineering & Construction filed for court receivership Wednesday fanned worries about the potential domino effect on other builders, weighing on banks that lend heavily to them, said Kwak Byung-Ryel, an analyst at Daishin Securities.

Hana Financial Group sank by the daily limit of 15%, Woori Finance Holdings plunged 14.8% and Shinhan Financial Group declined 6.4%. Among builders, both Daewoo Engineering & Construction and Daelim Industrial lost 10.9%.

In Shanghai, export-oriented companies rose on Beijing's efforts to support economic growth. The benchmark Shanghai Composite Index, which tracks both Class A and Class B shares, ended up 3.7% at 1927.61. Export-oriented companies, such as textile and furniture manufacturers, rose following the tax rebate rate cut. Lu Thai Textile jumped 5.3% Guangdong Yihua Timber Industry surged by the 10% daily limit.

Rosalind Mathieson and Kate O'Keeffe contributed to this article.

Write to Yun-Hee Kim at yun-hee.kim@dowjones.com

/zigman2/quotes/203649727/composite
US : U.S.: Nasdaq
$ 48.89
+0.33 +0.68%
Volume: 22.32M
Aug. 14, 2020 4:00p
P/E Ratio
9.00
Dividend Yield
2.70%
Market Cap
$206.53 billion
Rev. per Employee
$659,665
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/zigman2/quotes/205628942/delayed
JP : Japan: Tokyo
¥ 3,435.00
-45.00 -1.29%
Volume: 967,900
Aug. 14, 2020 3:00p
P/E Ratio
106.37
Dividend Yield
0.58%
Market Cap
¥1573.90 billion
Rev. per Employee
¥26.86M
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/zigman2/quotes/203656770/delayed
JP : Japan: Tokyo
¥ 3,085.00
-18.00 -0.58%
Volume: 4.90M
Aug. 14, 2020 3:00p
P/E Ratio
7.36
Dividend Yield
6.16%
Market Cap
¥4258.00 billion
Rev. per Employee
¥79.40M
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/zigman2/quotes/204507985/delayed
JP : Japan: Tokyo
¥ 143.80
-0.60 -0.42%
Volume: 84.76M
Aug. 14, 2020 3:00p
P/E Ratio
8.93
Dividend Yield
5.22%
Market Cap
¥3613.98 billion
Rev. per Employee
¥60.82M
loading...
/zigman2/quotes/202687335/delayed
HK : Hong Kong
HK$ 34.70
-0.70 -1.98%
Volume: 30.19M
Aug. 14, 2020 4:08p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
HK$735.85 billion
Rev. per Employee
HK$2.88M
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/zigman2/quotes/200868736/delayed
HK : Hong Kong
HK$ 58.65
-0.35 -0.59%
Volume: 19.78M
Aug. 14, 2020 4:08p
P/E Ratio
10.25
Dividend Yield
5.54%
Market Cap
HK$1166.08 billion
Rev. per Employee
HK$1.88M
loading...
/zigman2/quotes/204979431/delayed
HK : Hong Kong
HK$ 2.71
-0.02 -0.73%
Volume: 57.09M
Aug. 14, 2020 4:08p
P/E Ratio
22.53
Dividend Yield
5.85%
Market Cap
HK$863.47 billion
Rev. per Employee
HK$5.32M
loading...
/zigman2/quotes/200234512/delayed
HK : Hong Kong
HK$ 368.40
-3.60 -0.97%
Volume: 2.95M
Aug. 14, 2020 4:08p
P/E Ratio
51.43
Dividend Yield
1.82%
Market Cap
HK$467.64 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/205176597/delayed
HK : Hong Kong
HK$ 7.61
-0.03 -0.39%
Volume: 6.34M
Aug. 14, 2020 4:08p
P/E Ratio
4.11
Dividend Yield
6.11%
Market Cap
HK$219.92 billion
Rev. per Employee
HK$2.10M
loading...
/zigman2/quotes/201448516/delayed
AU : Australia: Sydney
$ 40.01
+0.10 +0.25%
Volume: 5.00M
Aug. 14, 2020 4:10p
P/E Ratio
14.97
Dividend Yield
5.33%
Market Cap
$188.57 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/200083756/delayed
AU : Australia: Sydney
$ 101.15
-0.36 -0.35%
Volume: 1.77M
Aug. 14, 2020 4:10p
P/E Ratio
15.41
Dividend Yield
5.60%
Market Cap
$147.25 billion
Rev. per Employee
$1.14M
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