The MSCI Asia Pacific Index declined 0.5% to 82.29 as of 1:02 p.m. in Tokyo, ending a four-day, 7.6% rally. The index has tumbled 48% this year
Asian stocks were trading mixed on Monday, as the nagging concerns over the global economic slump and its impact on the regional economies escalated after China’s manufacturing shrank by the most on record and export orders plunged.
Separately, corporate profit growth in Australia slowed and Japan's Morimoto Co. became the country’s second-largest bankruptcy this year. Honda led Japanese automakers lower as the world's second-biggest economy headed for its weakest year of domestic automobile sales in decades.
Regional investors largely shrugged off an upbeat session Friday that saw US stocks rise in a holiday-shortened session. The Dow Jones Industrial Average ended 1.2% higher at 8,829, marking a 17% rise for the week and its best five-day percentage gain since 1932.
The mood in Asia was also affected by a lack of progress in the Thailand political crisis, which has shut the nation's main international airport.
The MSCI Asia Pacific Index declined 0.5% to 82.29 as of 1:02 p.m. in Tokyo, ending a four-day, 7.6% rally. The index has tumbled 48% this year, set for the worst annual performance on record, as the US housing slump sparked a global financial crisis that dragged the world’s biggest economies into recession.
Japan’s Nikkei 225 Stock Average was down 134 points or 1.6% at 8,378 while the Hang Seng in Hong Kong gained 318 points or 2.3% at 14,206. The Kospi in Seoul was nearly unchanged at 1,073 while the Straits Times in Singapore lost 15 points or 0.8% at 1,717.
The Shanghai Composite index in China was up 9 points or 0.5% at 1,880 while the Taiex in Taiwan rose 101 points or 2.3% to 4,561. The S&P/ASX 200 index in Sydney dropped 60 points or 1.6% at 3,681.
BHP Billiton, the world’s largest mining company, lost 3.6% after prices of coal used in power stations slumped to a 13-month low. Mitsubishi Estate, Japan’s second-biggest property developer, lost 4.7%.
Suzuki Motor, the largest seller of cars in India, plunged 7.5% amid concern that last week’s terrorist attacks in Mumbai will hurt product demand. The deadliest terrorist attack in 15 years rocked India’s financial hub Mumbai last week with at least 195 people killed.
An index of six metals traded on the London Metal Exchange (LME), including copper and zinc, dropped 1.4% on Nov. 28. Copper futures in New York lost 0.7% in after-hours trading.
Mitsubishi Estate, which owns office buildings in Tokyo’s main business district, fell 4.7%. Mitsui Fudosan Co., Japan’s largest property developer, retreated 3.8%.
Morimoto filed for protection from creditors on Nov. 28 with 162 billion yen (US$1.7bn) of debt, nine months after its initial public offering. The bankruptcy, Japan's second-biggest in this year, drove corporate failures of listed companies to the highest level since World War II. Trading in Morimoto was suspended.
Japan General Estate Co., a condominium and home developer, plunged 12%, a record low. The company canceled plans to hire 53 college graduates, a rare occurrence among Japanese companies, the Mainichi newspaper said on Nov. 28.
AirAsia Bhd., Southeast Asia’s biggest discount airline, lost 6.3% in Kuala Lumpur after posting its first quarterly loss since going public in 2004.
Ushio Inc. plunged 10%. The world’s biggest maker of digital cinema projectors and replacement lamps slashed its full-year net income forecast 59% citing weaker demand for lamps from semiconductor and panel producers.
A gauge of China's manufacturing, as compiled by brokerage CLSA Asia-Pacific markets, fell to 40.9 in November, marking the sharpest contraction in the history of the survey, which began in 2004.
Eric Fishwick, head of economic research at CLSA, described the data as grim in a research note, adding that it showed the global slowdown now overshadows what has until recently been a mainly domestic-led slowdown in the Chinese economy.
"Export orders will weaken further and we expect further cuts in production and employment. Costs are plummeting but the benefit to margins is being offset by output price cuts as businesses try to protect market share," Fishwick wrote.
The International Monetary Fund (IMF) said on Nov. 7 that the US, Europe and Japan may experience the first simultaneous recessions in the post-World War II era. The World Bank slashed its growth outlook for China last week to 7.5% for 2009, which would be the slowest pace of growth since 2001.
Shares of Honda were down 4.9% while Toyota fell 3% and those of Nissan fell 2.2%.
Japan's Nikkei newspaper reported over the weekend that slumping automotive sales in October and what is likely to be a soft November will put domestic sales on track for about 3.25mn vehicles this year, excluding mini vehicles, marking the lowest level in 34 years.
