Credit Fears Keep Heat On Asian Stocks

Source : The Straits Times, Sep 18, 2007

HONG KONG - ASIAN stocks fell on Tuesday, with financial shares under pressure as investors fretted that the turmoil in credit markets would spread, while US crude hit an all-time high above US$81 (S$122) on supply worries.

Credit worries flared up after thousands of savers lined up on Monday to pull deposits from Britain's fifth-largest housing lender, Northern Rock, which fell victim to the sharp rise in borrowing costs between banks and had to be rescued by emergency Bank of England funding last week.

TOKYO
Japanese share prices slumped 1.77 per cent in morning trade on Tuesday as investors waited nervously for a key US interest rate decision, dealers said.

They said investors remained jittery about the fallout from problems in US mortgages, particularly in light of the financial woes of British bank Northern Rock whose customers have rushed to withdraw their cash.

The Tokyo Stock Exchange's benchmark Nikkei-225 index of leading shares fell 286.11 points to 15,841.31 by lunch, giving up most of Friday's gains.

The broader Topix index of all first-section shares dropped 27.80 points or 1.80 per cent to 1,516.91.

CHINA
Chinese stocks were mixed on Tuesday as strength in many non-ferrous metals shares offset weakness in the banking sector.

The Shanghai Composite Index ended the morning up 0.12 per cent at 5,427.834 points, after earlier hitting a fresh all-time, intra-day high of 5,458.578. But losing Shanghai stocks outnumbered gainers by 443 to 402.

Turnover in Shanghai A shares rose to an active 92.6 billion yuan (S$18.6 billion) from Monday morning's 88.01 billion.

HONG KONG
Hong Kong stocks fell 0.4 per cent on Tuesday, as weak global equity markets amid concern over a credit crunch led investors to lock in profits in recent gainers such as property plays.

At midday, the benchmark Hang Seng Index was down by 71 points or 0.29 per cent to 24,528.34.

KUALA LUMPUR
Share prices on Bursa Malaysia were mixed in early trading as investors turned cautious ahead of the Federal Open Market Committee (FOMC) monetary policy meeting later today, a dealer said.

At 12.30pm, the Composite Index was down 6.63 points to 1,271.71 after opening at 1,277.85 compared with Monday's closing of 1,278.34. -- REUTERS, AFP, BERNAMA