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Asia stocks sink, oil hits record above $144
(Agencies)
Updated: 2008-07-03 14:58 HONG KONG - Asian stocks slumped on Thursday on signs of further deterioration in the US economy, fresh record highs for oil prices and fears that stagflation will continue to damage company earnings and consumer spending.
Japan's Nikkei share index fell for the 11th consecutive day, on track for the longest losing streak in a half century, after the Dow Jones industrial average sank into bear market overnight, closing more than 20 percent below its October peak. The dollar fell to a two-month low against the euro after a report on Wednesday showed US private employers cut the most jobs in nearly six years. The euro, by contrast, was supported by expectations that the European Central Bank will later in the day raise its benchmark interest rate for the first time in a year. Investors will focus on whether ECB policymakers there will drop any hints that more borrowing costs will have to rise further to fight inflation despite a global economy that is growing below its long-term trend. Markets are also awaiting US non-farm payroll data later in the day. "Sentiment is simply very bad. There's just way too much uncertainty about where things go from here," said Yutaka Miura, senior technical analyst at Shinko Securities in Tokyo. Weakness was by no means unique to Japanese stocks in the midst of a toxic mix of rising inflation and slowing growth known as stagflation. The MSCI index of Asia-Pacific shares traded outside of Japan fell 1.2 percent to the lowest since a blowup in the US subprime mortgage sector turned into a global credit crisis 10 months ago. Australia's S&P/ASX 200 index fell more than 2 percent to a 21-month low, weighed down by the mining sector on concerns that slowing global economic growth will hurt demand for commodities and following a slump in coal prices. BHP Billiton Ltd , the world's top miner, dropped 5.8 percent to A$40.42, while its main rival and takeover target, Rio Tinto Ltd , shed 5.4 percent to A$125.17. Seoul shares fell 1.8 percent and Hong Kong's Hang Seng Index was set to open down 1.5 percent. "Foreigners are continuing to offload shares, and local institutions and retail investors have joined the selling spree as panic spreads in the market," said Juhn Chong-kyu, a market analyst at Samsung Securities in Seoul. The euro rose as high as $1.5893, the highest since late April and edging closer to an all-time peak of $1.6020 that was also hit in April. |
