Malaysian and Asian stocks fall Thursday

  • Business
  • Thursday, 16 Aug 2007

KUALA LUMPUR: Malaysian and Asian share prices fell Thursday battered by persistent jitters over U.S. housing loan problems and their possible damage to global financial markets. 

At 2.29pm (0629gmt) the KLCI had fallen 43.87 points to 1,207.95 after opening 12.02points lower at 1,239.80. 

There were 1,115 losers against 26 gainers and 55 counters were unchanged. 

In the Philippines the 30-company Philippine Stock Exchange Index fell 188.03 points, or 6.01 percent, to 2942.31, the index's lowest finish since January and its second sharpest fall this year.  

The index has dropped 9.8 percent the past two days. 

"It appears to us that the market has thrown fundamentals out of the window,'' said Francisco Liboro with PCCI Securities Brokers Corp.  

"Panicky investors no longer appreciate value laden issues that have dropped to bargain share prices while maintaining their profit growths.'' 

In New Zealand the central bank said Thursday it is closely monitoring developments in domestic markets in the wake of the growing global credit crisis, and stands ready to inject liquidity if needed. 

The local share market Thursday marked its fifth consecutive loss in five days. 

It closed the day with the benchmark NZX-50 down 1.2 percent at 3,957.93.  

The index has lost more than 8 percent in three weeks, including 3.7 percent since Monday. 

The global credit market turmoil also knocked the local dollar to a five-month low of US$0.6825 in afternoon trading as foreign investors exit their New Zealand holdings. 

The Kiwi, as the local currency is known, lost nearly 5.0 percent of its value in a few hours in what traders said was its biggest fall in a single session since the 1998 Asian crisis. 

It closed locally at US$0.6913. 

In South Korea shares plunged Thursday to their lowest level in more than two months. 

The Korea Composite Stock Price Index fell 6.9 percent, or 125.91, to close at 1,691.98, its worst point drop ever and lowest finish since May 30.  

Earlier, the Kospi had fallen as low as 1,681.71, or 7.5 percent from Tuesday.  

Markets were closed Wednesday for a national holiday. 

The Korea Exchange briefly halted computer-generated program trading for about five minutes nearly an hour into the session amid the deluge of sell orders. 

In Tokyo the benchmark Nikkei 225 index fell 327.12 points, or 1.99 percent, to close at 16,148.49 points. 

The previous session the index fell 2.2 percent. 

Hong Kong's blue chip Hang Seng Index was down 3.7 percent midafternoon. 

Repercussions in Asian markets were bigger compared to the loss of 1.3 percent overnight in the U.S. - where the loan problems erupted. 

That's because of uncertainty over the size of impact on corporate earnings and the regional economy, said Shinichi Ichikawa chief strategist at Credit Suisse.  

"All of Asia and other European markets are watching the U.S. market,'' said James Soh, a strategist at Korea Investment & Securities Co. in Seoul.  

The Federal Reserve added more cash to the U.S. banking system Wednesday, and other central banks have been pouring cash into their banking systems as well since the end of last week.  

But the injections has so far failed to quash investors' jitters and halt the global slide. 

Some investors have been calling for the U.S. central bank to free up more cash by making an interest rate cut at its Sept. 18 meeting, but the Fed has given no indication it is considering a hike. 

The Bank of Japan injected 400 billion yen (US$3.4 billion; euro2.5 billion) into money markets Thursday morning, the third time since last Friday it has acted in a bid to curb rises in a key overnight interest rate. 

Despite the move, banking issues took a beating in Tokyo due to the global credit concerns.  

Sumitomo Mitsui Financial Group was off nearly 6 percent at midday. 

South Korea's Vice Finance Minister Kim Seok-Dong echoed the concern, vowing to swiftly deal with the impact of global market fluctuations . 

"If there is a credit crunch in the domestic financial market due to a ripple effect from international financial markets, the government will deal with the matter by immediately injecting liquidity,'' Kim said. 

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