- The Washington Times - Thursday, November 13, 2008

BANGKOK, Thailand (AP) – Asian stock markets tumbled Thursday as more signs of a sharp downturn in the U.S. economy spurred investors to dump shares of exporters like Sony and resource companies like BHP Billiton.

Investors also reacted nervously to U.S. Treasury Secretary Henry Paulson’s announcement that the government’s $700 billion financial rescue package won’t purchase troubled assets from banks as originally planned. The Treasury will instead rely on buying stakes in banks and encouraging them to resume more normal lending.

Japan’s benchmark Nikkei 225 stock average fell 456.87 points, or 5.3 percent, to 8,238.64 and Hong Kong’s Hang Seng index dived 5.2 percent to 13,221.35.

Australia’s benchmark index slid 5.9 percent to a four-year closing low of 3,697.3 as banks tumbled and lower commodity prices hit miners. BHP Billiton Ltd., the world’s biggest miner, sank almost 12 percent and Rio Tinto was down more than 8 percent.

“The negative corporate and economic news flowing out of the U.S. is what markets have been expecting and it doesn’t change the picture investors have, which was already bad,” said Porranee Tongyen, head of research at Asia Plus Securities in Bangkok.

Grim news from companies weighed on U.S. stocks overnight with the Dow Jones industrial average falling 4.7 percent to 8,282.66, its third straight loss. Department store chain Macy’s Inc. said it lost $44 million in the third quarter as sales fell more than 7 percent, and consumer electronics retailer Best Buy Co. slashed its fiscal 2009 guidance on fears that consumer spending will erode even further.

That’s bad news for Asia’s exporters of electronics, clothing and other products.

With earnings season drawing to a close, markets are now turning their focus to the upcoming Christmas shopping season to gauge the extent of the U.S. slowdown, said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities in Tokyo.

“It’s of course going to be bad,” he said. “The question is how bad.”

U.S. stock index futures were narrowly mixed. Dow futures were up 11 points, or 0.1 percent, to 8,891, while Nasdaq futures were down 7 points, or 0.6 percent, to 1,156.5.

Shanghai Composite Index bucked the regional trend, jumping 3.7 percent to 1,927.61 as the Chinese government’s $586 billion economic stimulus package announced Sunday continued to underpin sentiment.

Stephen Roach, chairman of Morgan Stanley Asia, said China’s stock market, where the key index has fallen by about two-thirds since its peak last October, may rebound next year if the country can maintain a high growth rate.

“There are earnings problems now emerging in Chinese companies which are producing stiff headwinds for a number of high-profile Chinese stocks. But I think the market has taken a lot of that on board and so if China ends up growing more rapidly than investors expect, and I think that will be the case in 2009 and into 2010, this market could turn around a lot,” Roach told reporters during a conference in Singapore.

Exacerbating the gloom in Tokyo was a strengthening yen, which erodes the value of their overseas earnings when converted back to the local currency. The yen was trading at 96.04 to the dollar in Asia, versus 97.98 yen a day earlier.

Sony Corp. plunged 8.7 percent, Nintendo Co. was off 6.9 percent and Panasonic Corp. retreated 7.4 percent.

Another electronics maker, Sharp Corp., closed down 8.4 percent on news it agreed to pay $120 million after pleading guilty to conspiring with two other companies to fix prices of LCD screens in the U.S.

South Korea’s main Kospi index fell 3.2 percent to close at 1,088.44 after earlier falling as much as 7.4 percent. So far this year, the index has declined 42.6 percent. Samsung Electronics Co. dipped 1.4 percent while Hyundai Motor Co. fell 3.6 percent.

Oil prices continued their decline after the U.S. Energy Department said Wednesday it expects U.S. consumption of petroleum to next year drop more severely than any time since 1980. Light, sweet crude for December delivery was down $1.18 to $54.98 a barrel, after falling as low as $54.67 in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore.

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Associated Press writers Alex Kennedy in Singapore and Tomoko A. Hosaka in Tokyo contributed to this report.

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