Credit Worries Keep Asian Stocks In Check

Source : The Straits Times, Aug 17, 2007

HONG KONG - STUBBORN fears of a global credit squeeze kept Asian stock markets mostly under pressure on Friday and boosted the yen, but financial shares rebounded, thanks to a dramatic turnaround on Wall Street.
Worries that the financial market turmoil will hurt global growth also weighed on exporters and continued to drive investors to safe-haven government bonds.

Speculation of a possible US interest rate cut and talk that Bear Stearns, one of the largest US mortgage bond underwriters, would get funding from a Chinese bank helped spark the last-minute US rebound, led by financial issues.

SINGAPORE
The Straits Times Index open lower on Friday, the third straight session of losses, as investors remained cautious amid credit market worries and lower stock markets across Asia.

At midday, STI was down by 108.48 points or 3.44 per cent to 3,043.68

HONG KONG
Hong Kong share prices plunged below the key 20,000 points level on Friday with investors still fretting over the extent of credit problems in the wake of the US subprime crisis, dealers said.

By midday, the Hang Seng Index slumped 688.8 points to 19,983.64 after opening 88.92 points higher at 20,761.31.

The last time the index hit below the key level was in Jan 17 this year at 19,841.00.

TOKYO
Japanese share prices were down by more than five per cent in late trade on Friday as US housing worries battered Asian markets, dealers said.

The Tokyo Stock Exchange's benchmark Nikkei-225 index of leading shares tumbled by as much as 886.40 points or 5.49 per cent to 15,262.10.

The Japanese market has been particularly hit by concerns over a rising yen, which hurts exporters.

The Japanese currency has shot higher as dealers unwind risky carry trade bets that play on differences in global interest rates. -- AFP

CHINA
China's main stock index fell 0.71 per cent at midday, led by large-caps as institutions continued to take profits aggressively.

But rises in a wide range of shares - and the fact that no stock fell its 10 per cent daily limit - showed many individual investors remained positive towards the market, believing capital controls would keep China immune from plunges in global markets.

The Shanghai Composite Index ended the morning at 4,731.379 points, with losing Shanghai stocks outnumbering gainers by 501 to 373.

Turnover in Shanghai A shares shrank to a modest 62.2 billion yuan (S$12.6 billion) from Thursday mornin'?s 66.4 billion.

Several traders said the index might move between 4,500 and 5,000 points in coming weeks.

KUALA LUMPUR
Share prices on Bursa Malaysia turned lower at mid-morning as gains posted earlier were clipped by profit-taking activities, dealers said.

As of 12.30 pm, the 100-quality stocks Composite Index dropped 30.13 points to 1,177.48.

Decliners outnumbered advances by 1,007 to 44 while 101 counters were unchanged, 249 untraded and 33 suspended.

Volume stood at 846.202 million shares valued at RM1.35 billion (S$593 million).

SEOUL
Seoul shares fell 3.3 per cent on Friday, extending losses for the session as fears about a global credit squeeze and its potential impact on the global economy continued to weigh on blue chips such as Hyundai Heavy and POSCO.

The benchmark Korea Composite Stock Price Index (KOSPI) was down 3.3 per cent to 1,636.40 points by 12.50 pm Singapore time.

The main index has now dropped 10.5 per cent for the week, and is on course to post its biggest drop since the week of Sept 11, 2001, when the KOSPI fell 13.1 per cent as global markets reeled after attackers crashed airliners on US targets. -- REUTERS, AFP