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Asian markets brace for turmoil
Staff and wires
TOKYO, Japan -- After a day of hefty losses, including a new 19-year low for Japan's Nikkei, Asian markets are bracing for further shocks from Wall Street overnight. The Dow Jones industrial average has fallen for six straight weeks and preying heavily on investor's minds on Monday will be an address to the nation where U.S. President George W. Bush will present his case against Iraq. (Bush's speech) Added to downbeat expectations for U.S. stocks is further anxiety over the unresolved West Coast port dispute that has already hit the United States and Asia hard. (U.S. markets latest) It was a gloomy beginning for Asia's trading week with Japan leading markets sharply lower. The Nikkei again set a fresh 19-year low on fears about a new round of corporate collapses. The Nikkei 225 average ended at 8,688.0, down almost 340 points or 3.76 percent -- its lowest close since June 1983. At one point in the morning session it fell as low as 8,650.36. The big Japanese banks took the brunt of the falls, UFJ Holdings plunging almost 12 percent to a record low. Sumitomo Mitsui Banking Corp lost more than 9 percent. The broader, capital-weighted Topix closed 3.49 percent to 860.47, its lowest finish since November 1984. Other markets also suffered. Australia's S&P/ASX200 closed at its lowest level in 13 months, Taiwan's Taiex dropped 3.5 percent to a 12-month low of 3924.04 and South Korea's Kospi fell 3.76 percent to 627.40, again the lowest level in a year. Hong Kong's Hang Seng index ended off over 1 percent, having fallen through its September 11 mark to four-year lows during the day. Singapore's Straits Times index is the only major market in the black, up 0.63 percent to 1,376.23 heading towards the close. Worried about bad loans
Japan, by far the region's biggest stock market, dominated movements. Investors are worried that tough new action by the Koizumi administration over the big banks' estimated $400 billion in bad loans could set off more corporate collapses at a time when any economic recovery is fragile at best. (Full story) "Sentiment is really shot right now," Koichi Seki, equity manager at Chuo Securities, told Reuters news agency. "Investors are scared of the impact of rising bankruptcies. And on top of that, worries of a war in Iraq and a slowdown in the U.S. economy are really weighing." Mizuho Holdings fell 7.55 percent to 196,000 yen, UFJ Holdings plunged 11.93 percent to a record low of 192,000 yen and Sumitomo Mitsui Banking Corp dropped 9.03 percent to 514 yen. Mitsubishi Tokyo Financial Group, generally regarded as the strongest of the big four, lost 7.46 percent to 781,000 yen. Adding to fears about instability in the financial sector, top financial regulator Heizo Takenaka was quoted on Monday as saying that Japanese authorities do not believe major banks are too big to fail.Full story) Daiei dumpedShares in troubled borrowers such as retailer Daiei Inc were dumped on expectations the government would force banks to tighten the screws on ailing companies. Daiei, which in February received a $4 billion bailout from its top three creditors, including UFJ, plunged 30 percent to 87 yen. It was the biggest percentage loser on the first section of the Tokyo Stock Exchange, having lost more than 30 percent last week. Chipmakers and other tech-related stocks also felt the heat, with NEC down 7.5 percent to 480 yen, Fujitsu off 7.96 percent to 451 yen and Hitachi at a four-year low, off 5.16 percent to 533 yen. Chip and computer-maker Toshiba plunged 6.6 percent to 312 yen, while consumer electronics leader Sony lost 2.5 percent to 5040 yen and Canon dipped 5.24 percent to 3800 yen. Automakers were weaker too, but the falls were not as spectacular as techs. Toyota lost 2.6 percent, while Honda and Nissan both dropped more than 3 percent. On Friday, the tech-laden U.S. Nasdaq composite index fell 2.2 percent, while the broader Wall Street market ended with its sixth straight week of losses. (Full story) South Korea off sharply
South Korean stocks almost matched the Nikkei's slump, falling to a 10-month low. Seoul's biggest listing, Samsung Electronics, lost 3.27 percent to 296,000 won, and other big caps also fared badly. Steelmaker POSCO lopped off 4.85 percent to 108,000 won, investors fretting over construction worldwide and whether a recent steel price hike would hold. Hyundai Motor tumbled almost 6 percent to 26,900 won as the U.S. port strike continues. Domestic debt worries knocked Kookmin Bank, down 7 percent to 38,500 won. In Taiwan, the Taiex plunged through the 4,000 barrier to end down 3.53 percent at 3,924.04. That is a fresh 11-month low. Chipmaker Mosel Vitelic fell the daily 7 percent limit to T$6.35 after German peer Infineon Technologies canceled a joint venture agreement because of what it claimed were repeated contract breaches. The market's two biggest stocks, chip foundries TSMC and UMC, were also weaker. TSMC fell 5.26 percent to T$36.00 and UMC dipped 6.1 percent to T$20.00. Australia lowerIn Australia, the S&P/ASX200 closed down 1.72 percent to 2,940.0, driven lower by Wall Street. Media group News Corp. dipped 4.22 percent to A$8.85. The big four banks were also lower, with Westpac the worst, off 3.5 percent to A$13.50. Retailer Coles Myer was also down, off 0.9 percent to A$6.49 after warning its Myer Grace department store subsidiary would have to post a profit in the first half to show a gain for the year. Australian trade was quiet, with parts of the country celebrating a public holiday. New Zealand's Top 40 index closed narrowly in the red, down 0.2 percent to 1,976.76 as it again fared better than most Asia Pacific markets. Telecom New Zealand was just slightly lower, down 0.2 percent to NZ$4.89. Hang Seng below 4,000In Hong Kong, the Hang Seng dropped 1.33 percent to 8,931.40, recovering slightly after falling below its September 11 mark of 8,894.36. Former high-flying Internet and telecom play PCCW briefly became a penny stock and settled at a close of HK$1.00, off 1.98 percent. That's a far cry from its HK$28.50 high in early 2000, at the height of the dot.com boom. Legend Group, China's biggest computer company, plummeted 11.76 percent to HK$2.25 on fears Beijing may trim its education budget. Exporter Li & Fung gained 1.40 percent to HK$7.25 as investors factored in progress on talks to end the U.S. ports blockage. Singapore's bank leader DBS is about 1 percent lower, but rival UOB is up 4.2 percent to S$12.40 with less than an hour to go. Indian stocks are also up, the Bombay Stock Exchange index ahead 0.59 percent in afternoon going. Reuters contributed to this report.
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