Asian stocks plunged deeper into the red Tuesday, as confirmation of
a U.S. recession and further falls in commodity prices dealt blows to
exporters and oil producers. Financials also slid on some re-emerging
signs of heightened borrowing costs. The surging yen continued to erode
Japanese companies' overseas earnings.
Japan's Nikkei 225 sank
5.0% to 7,978.75 points in midafternoon trading, following the lead of
the Dow Jones industrial average, which shed 679.95 points, or 7.7%, to
8,149.09 Monday. The National Bureau of Economic Research declared that
a U.S. recession started in December 2007. Japanese financials suffered
steep losses, as Mizuho Financial Group
(nyse:
MFG -
news
-
people
) tumbled 7.6%, Sumitomo Mitsui
(other-otc:
SMFJY -
news
-
people
) lost 6.6% and Mitsubishi UFJ
(nyse:
MTU -
news
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people
) slid 6.7%. Nomura Holdings
(nyse:
NMR -
news
-
people
),
which said it aims to reel in 500.0 billion yen ($5.4 billion) in
pretax profit and 70.0 billion yen ($749.3 million) in investment
banking profit in 2010, fell 7.2%.
Hitachi
(nyse:
HIT -
news
-
people
) lost 3.5%, after the company and Intel Corporation
(nasdaq:
INTC -
news
-
people
)
jointly announced plans to release solid-state drives, high-end memory
storage drives that have no moving parts, by early 2010.
Hurting
exporters, the yen strengthened further against the dollar, briefly
reaching below 93 yen on the dollar, a five-week low in early trade.
Steelmaker JFE Holdings
(other-otc:
JFEEF -
news
-
people
) plunged 8.6%. Honda Motor
(nyse:
HMC -
news
-
people
) fell 6.8%.
Hong
Kong's Hang Seng index shed 4.8%, to 13,427.95, on steep slides in
financials and refiners. The three-month Hibor, or interbank lending
rate, climbed to 2.14% from 2.04%. HSBC
(nyse:
HBC -
news
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people
)tumbled 5.8%, amid reports that the bank plans to raise mortgage rates. Bank of East Asia
(other-otc:
BKEAY -
news
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people
) skidded 6.0%. CITIC Pacific
(other-otc:
CTPCY -
news
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people
)
requested a suspension of trading without giving a reason, after
soaring over 15% Monday. In November, the firm had to be bailed out by
its state-owned parent company after huge losses from unauthorized
forex trading (See "CITIC Pacific's $1.5 Billion Bailout: The Tarnish Remains").
PetroChina
(nyse:
PTR -
news
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people
) lost 7.0%, China Petroleum & Chemical Corp., or Sinopec
(nyse:
SNP -
news
-
people
), shed 6.2% and China National Petroleum Corp., or CNPC, slid 6.0%. In a turnaround from last week, Air China
(other-otc:
AIRYY -
news
-
people
) dropped 6.0%, as parent companies of its peers China Eastern Airlines
(nyse:
CEA -
news
-
people
) and China Southern Airlines
(nyse:
ZNH -
news
-
people
) have received or look likely to receive government aid due to steep fuel hedging losses.
China Unicom
(nyse:
CHU -
news
-
people
), which last week completed its merger with China Netcom
(nyse:
CN -
news
-
people
) as part of Beijing's telecom restructuring, sank 5.6%.
