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War nerves knock Japan, Australia
By Alex Frew McMillan
HONG KONG, China (CNN) -- Markets in Japan and Australia closed lower on Tuesday, with investors fearing the United States will push for war with Iraq. Australia sank more than 2 percent to close at its lowest in six weeks, while Japan finished about 1 percent lower as its big banks plunged. Traders across the region were skittish ahead of George W. Bush's State of the Union address on Tuesday. But most of Asia was able to resist the worst of the selling, having already slumped sharply on Monday. (Full story) South Korea, which led Monday's falls, put on 1.26 percent, and Malaysia also climbed more than 1 percent. There were lesser gains in Hong Kong, Taiwan and Singapore. New Zealand finished down. The increasingly hawkish tone of the Bush administration has caused financial markets around the world to sell off over the past week. War in the Persian Gulf would disrupt international trade, drive oil prices higher and dampen international travel and tourism. War concerns hit the U.S. stock market on Monday, with the Dow Jones industrial average crunching below the 8,000 mark for the first time since October 14. The Dow dropped 1.74 percent to 7,989.56 and is now off 4.2 for the year. Nasdaq drifted 1.26 percent to 1,325.27, in the seventh day of declines out of eight for U.S. stocks. (Full story) Nikkei in general slideOn Tuesday, Japan's Nikkei average fell 0.98 percent to end the day at 8,525.39. The broader Topix lost 1.05 percent to finish at 841.12. Japan's largest listing, NTT DoCoMo, fell 1.27 percent to 234,000 yen, while rival cell-phone service KDDI fell 0.82 percent to 361,000 yen.
Sony Corp. closed down 1.22 percent at 4,850 yen. Immediately after the end of trade, the company said Chairman Norio Ohga will step down for health reasons, being replaced by CEO Nobuyuki Idei. There was little to encourage investors, with fresh data showing that Japan's retail sales fell in December, for the 21st straight month of decline. (Full story) Banks suffered some of the heaviest selling, with any disruption to the economy likely to hit their already shaky roster of borrowers. Mizuho Holdings tumbled 5.34 percent to 124,000 yen, while UFJ Holdings lost 4.7 percent to 142,000 yen. Mitsubishi Electric closed unchanged at 315 yen after the company said it would essentially exit computer manufacturing, by outsourcing that business to NEC Corp. NEC ended off 0.85 percent to 466 yen. (Full story) The yen is a little weaker at 118.36 to the U.S. dollar but is expected to gain if the United States does go to war. Property stocks lift Hang SengHong Kong's Hang Seng index finished 0.29 percent higher at 9,325.60. Bank stock HSBC continued its march south, Hong Kong's largest listing down 0.60 percent to HK$83.25.
Rival bank Standard Chartered was down 0.59 percent to HK$83.75, with both banks globally exposed to any economic weakness. PCCW was slightly higher at HK$6.35 after the company completed its first unsecured bond offering, a $456 million bond deal that will help it lower its debt level. There were gains for property stocks such as Cheung Kong Holdings, up 0.75 percent to HK$51.00, and Henderson Land, ahead 0.6 percent to HK$22.45. Property developers and other companies with limited international exposure are expected to benefit if the U.S. dollar and pegged Hong Kong dollar continue to weaken. Stock in the International Bank of Asia soared Tuesday, closing up 13.5 percent at HK$2.95. Its shares were suspended Monday as Malaysian bank Hong Leong expressed its interest in buying control of the bank. (Full story) Australia down sharplyAustralia's S&P/ASX 200 index finished down 2.04 percent at 2,964.4, hitting a six-week low. News Corp. was off 5.7 percent to A$11.23. Mining company and oil producer BHP Billiton also fell sharply, down 3.62 percent to A$9.04, despite moving a step closer to a joint venture with South Korea's Posco on iron-ore mining. (Full story) Rio Tinto and WMC Resources were also well in the red, while troubled financial group AMP dipped to another record low on its U.K. woes, off 4.39 percent to A$9.37. Telecom stock Telstra fell 0.87 percent to A$4.57. Banks and airline Qantas were also closed lower. But grocer Woolworths was up 1 percent, after reporting strong first-half sales. (Full story) Gold hit a six-month high of $370 an ounce on Monday, a sure sign that investors are fleeing risky investments and looking for the safest haven from a possible storm in the Gulf. China Steel upTaipei's Taiex finished up 0.86 percent to 5,015.16 and Seoul's Kospi jumped 1.26 percent to 600.56. Despite a fall of 2.45 percent for market heavyweight TSMC, a host of smaller tech companies drove Taiwan stocks higher. UMC, Via and Mosel were up. Domestic industrials also attracted some buyers. China Steel rose 3.98 percent to T$23.50 and Grand Petrochemical rose 4.6 percent to T$18.20. Samsung rebounds in SeoulIn South Korea, Samsung Electronics rebounded after heavy selling on Monday, jumping 2.68 percent to 307,000 won. The second-largest listing, SK Telecom, fell 0.28 percent to 180,000 won as the cell-phone company suffered more fallout from disappointing earnings last week. Preliminary figures showed the Singapore Straits Times index closed up 0.68 percent at 1,340.34. Bank stock UOB Ltd. gained 0.88 percent to S$11.40, and Singapore Airlines was up 0.50 percent to S$10.00. Chartered Semiconductor topped the volume with a 1.39 percent lift to S$0.73. The Malaysian market was also up, the Kuala Lumpur composite climbing 1.05 percent to 671.63, ending two days of losses.
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