Thursday, October 2, 2008

TOKYO (AP) — World stock markets were mixed Thursday as broader concerns about a global slowdown dampened relief over the U.S. Senate’s passage of the $700 billion bank rescue package.

Japan’s Nikkei 225 average fell 1.9 percent to 11,154.76 and benchmarks in Australia, South Korea and Taiwan also dropped.

As the day progressed, the mood seemed to improve. Hong Kong‘s market, down for much of the day, managed a late-day rally, lifted by gains in insurer Ping An and expectations that China will introduce supportive market measures. The Hang Seng index rose 1.1 percent to 18,211.11.

European stocks opened higher, with Britain’s FTSE 100 up 1.1 percent, and Germany’s DAX gained 1.0 percent.

Related stories:

Senate passes rescue; House in doubt

Stocks open lower after Senate vote

Asian investors gave a tepid reaction to the Senate’s approval Wednesday to a revised bailout plan aimed at stabilizing the U.S. financial system. The House of Representatives, which rejected an earlier version of the bill, will likely vote on the bill Friday.

Even if the package is approved, traders are skeptical about its ultimate impact on a faltering global economy. Cleaning up the pile of bad debts on banks’ balance sheets will be a long, arduous process, and the crisis is spreading in Europe, where governments have bailed out two troubled banks, Fortis NV and Dexia.

“Investors are still concerned about the efficiency of this rescue plan and how it can help the global economy,” said Aric Au, marketing manager for institutional sales at Phillip Securities in Hong Kong. “But at this moment, nobody is sure about this. They need to have more information about the finalized plan.”

If the plan is rejected again by the House, “it will be a big problem” said Tsuyoshi Nomaguchi, a strategist at Daiwa Securities in Tokyo. “But even if it passes, the focus will be on the economy.”

Bleak data released overnight in the U.S. added to fears for the world’s largest economy. Auto sales plummeted, and a key measure of U.S. manufacturing activity hit its lowest level since the aftermath of the Sept. 11, 2002 terrorist attacks.

U.S. auto sales dropped below 1 million last month for the first time in more than 15 years as some consumers struggled to get financing and others were frightened away from showrooms by bank failures and turmoil on Wall Street.

Shares of Toyota Motor Corp. tumbled 3.4 percent after sales in the U.S. last month dropped 32 percent.

“Toyota is not immune to the economic cycle that is affecting the entire industry in the United States,” said Toyota spokesman Paul Nolasco.

Honda Motor Co. shed 4.5 percent after saying its U.S. sales fell 24 percent in September. Nissan Motor Co., whose U.S. sales plummeted 37 percent, declined 4.0 percent.

In Seoul, shares of top Korean automaker Hyundai Motor Co. slipped almost 1 percent. The company said Wednesday that its sold 25 percent fewer cars in the U.S. in September than a year earlier.

Other Japanese losers were commodities issues like JFE Holdings Inc., Japan’s second-largest steelmaker, which plunged 8.8 percent. Oil developer Inpex Corp. closed down 8.5 percent.

Hang Seng Bank, a unit of HSBC and Hong Kong’s third largest lender by assets, plunged 8.9 percent after it said holds debt securities issued by the now-defunct U.S. bank Washington Mutual.

But Ping An’s stock soared nearly 14 percent on news announced late Tuesday that it would not complete its proposed purchase of half of Belgian-Dutch bank Fortis NV’s asset management arm for 2.15 billion ($3 billion). Because of Wednesday’s market holiday in Hong Kong, it was the first chance for investors to react to the news.

U.S. stock futures were down slightly, suggesting Wall Street would open lower or mixed. On Wednesday, the Dow Jones industrial average dipped 0.2 percent to 10,831.07.

Markets in China, India, Malaysia and Indonesia were closed for national holidays.

Copyright © 2022 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.

Click to Read More and View Comments

Click to Hide