BLBG: Most Asian Stock Markets Fall on Profit Concern; Toyota Drops
By Sarah Jones and Shani Raja
Dec. 22 (Bloomberg) -- Most Asian stock markets fell, led by material producers and finance companies, on increasing signs the deepening global recession is hurting corporate profits.
Rio Tinto Group, the world’s third-largest mining company, dropped 4.1 percent as UBS AG cut its earnings target and as it halted production at an iron plant. HSBC Holdings Plc, Europe’s largest bank, declined 2.7 percent in Hong Kong after Standard & Poor’s gave the company a “negative” outlook. Toyota Motor Corp. lost 1.9 percent in Tokyo after the Sankei newspaper said the company may slash its dividend as auto demand slows. Shares fell even after the U.S. pledged a $13.4 billion support plan for its biggest automakers.
“There’s still a lack of visibility regarding the timing of the economic recovery,” said Shane Oliver, head of investment strategy at AMP Capital Investors, which manages $61 billion in Sydney. “The economy’s going to go through a very rough period. You can’t rule out further declines in the share market.”
The MSCI Asia Pacific Index fell 0.4 percent to 89.21 as of 2:19 p.m. in Tokyo, as five stocks declined for every four that advanced. The gauge has lost 43 percent this year, the worst annual performance in its two-decade history, as the credit crisis dragged the world’s biggest economies into recessions.
Losses and writedowns tied to the collapse the U.S. subprime-mortgage market rose above $1 trillion last week. The MSCI gauge has rallied 9 percent in December, on track for its first monthly gain since April, as governments from the U.S. to Japan slashed interest rates and took more steps to bolster their economies.
Japan’s Nikkei 225 Stock Average gained 1.1 percent to 8,683.18, led by lenders as interbank borrowing rates dropped. A report showed today that the nation’s exports plunged the most on record last month as demand for cars and electronics collapsed. Most other markets fell in Asia except New Zealand, Malaysia and Vietnam.
To contact the reporters for this story: Sarah Jones in Sydney at sjones35@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.
