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Asia joins global decline
HONG KONG, China -- Asia Pacific share markets ended broadly lower on Tuesday as investors worried a prolonged war in Iraq could prove costly for the U.S. economy. South Korea, Japan and Taiwan suffered the deepest losses; echoing sharp falls in U.S. and European bourses on Monday. Singapore was the only major stock market to register a gain. Seoul's Kospi was the top loser among regional indices, falling 2.61 percent to 554.98. A rebound in oil prices hit the transport sector, including shares of airlines and shipping companies. Samsung Electronics, the world's largest computer memory chipmaker, was the biggest drag on the market, losing 2.08 percent to 306,000 won. Korean Air, South Korea's largest airline, tumbled 9.91 percent to 10,450 won. Steel giant POSCO slid 3.38 percent to 99,000 won. U.S. light sweet crude for May delivery rose to $28.93 a barrel in after hours trade, extending Monday's 6.5 percent rally, as hopes began to fade for a swift end to the war in Iraq. Oil prices got a further boost from the civil violence in Nigeria which has halted nearly 40 percent of the OPEC member's output. Tokyo's Nikkei average dropped 2.33 percent to 8,238.76, wiping out most of a 2.93 percent rally in the previous session. The broader Topix closed 2.3 percent weaker at 812.29. "Looking back, last week's rally was based on an overly optimistic view of the war, and market participants have now calmed down, watching progress and what is actually happening," Takahiro Nakajima of Norinchukin Zenkyoren Asset Management told Reuters. Traders were also skittish after Monday's big falls on Wall Street, where the Dow Jones industrial average fell 3.61 percent -- its worst sell off in almost six months -- and the Nasdaq Composite lost 3.66 percent. (Full story) European markets were pummeled too, with London's FTSE down more than 3 percent and Paris and Frankfurt slumping more than 5 percent. (Full story) Japanese blue chips got no support from the Bank of Japan's mid-afternoon announcement of measures to lift the stock market from near 20-year lows. As expected, the BOJ decided to increase purchases of shares held by banks to three trillion yen ($24.85 billion) from the current two trillion yen. Earlier, the central bank kept its monetary policy unchanged after holding a rare emergency meeting to discuss the impact of the war in Iraq. The decision disappointed some analysts and investors who had hoped for bolder steps from new BOJ governor Toshihiko Fukui. (Full story) Shares of Japanese firms that do much of their business abroad fell on concern that a lengthy conflict in Iraq will undermine consumer sentiment, raise oil prices and curb global economic growth. Sony fell 2.41 percent to 4,450 yen and Toyota Motor slipped 3.58 percent to 2,825 yen. Hitachi lost 4.4 percent to 456 yen and Toshiba fell 6 percent to 339 yen. Mobile phone operator NTT DoCoMo, Tokyo's largest stock by market capitalization, dropped 5.81 percent to 227,000 yen. Taiwan lowerTaiwan's benchmark Taiex fell 1.57 percent to 4,498.83, its third daily drop and biggest decline since the market's pre-war rally began on March 11. Analysts said overseas investors showed signs of cashing out of major semiconductor shares. Chip foundry TSMC lost 3.92 percent to T$46.60 while rival UMC ended 3.69 percent lower at T$20.90. Other Asia Pacific markets posted small losses on Tuesday. Australia's S&P ASX 200 eased 0.14 percent to 2,854.4 as investors bet on a resilient domestic economy. Leading the market lower were companies with exposure to persistent weakness in the U.S. economy. Market heavyweight News Corp lost 1.74 percent to A$10.73, while BHP Billiton closed down 0.85 percent at A$9.32. New Zealand's Top 50 index fell 0.57 percent to 1.905.40. Telecom New Zealand was a steadying influence, unchanged at NZ$4.33. Hong Kong's Hang Seng Index ended 0.51 percent lower at 9062.15. HSBC was off 0.9 percent to HK$82.50. Key exporter Li & Fung fell 1.2 percent to HK$8.25 as Monday's impressive results were marred by a warning that it was slightly behind target on a three-year plan to double profits by 2004. Singapore's Straits Times index was Asia's best performer on Tuesday, rising 0.9 percent to 1,311.32. Dealers said investors picked up media and banking issues after their recent falls. Singapore Press Holdings rose 1.1 percent to S$18.40, ahead of its interim results on Friday, with analysts expecting a handsome dividend payout. Among the gainers was United Overseas Bank, up 3.85 percent to $10.80, while Singapore Airlines dropped 2.02 percent.
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