Asian stock markets slide amid US recovery doubts



Asian stock markets slide amid US recovery doubts Tokyo: Asian stock markets fell on Monday after grim news about American consumers sowed more doubts about the strength of the US economic recovery and sent Wall Street tumbling last week.

Exacerbating investor worries was US lender CIT Group's bankruptcy filing Sunday, which dragged financials sharply lower across the region.

Japan's key Nikkei 225 stock average led Asian declines, down 2.3 percent at 9,802.95. Hong Kong's Hang Seng index lost 1.7 percent at 21,378.17, while Australia's S&P/ASX200 was down 2.2 percent. South Korea's market dropped 1.6 percent.

Benchmarks in New Zealand, Taiwan and Singapore also fell, though the region recovered some early losses on strength in mainland China. The Shanghai Composite index was the only major market in positive territory, up 2.1 percent.

On Friday, US markets sold off after government figures for September showed personal spending fell 0.5 percent and personal income remained flat compared to the previous month. A drop in a key measure of consumer sentiment added to the day's troubling signs that US consumers, whose voracious spending helped drive global growth before the crisis, were unlikely to resume their spendthrift ways anytime soon.

More bad news followed Sunday with CIT filing for Chapter 11 protection after struggling for months to avert bankruptcy. It was one of the biggest filings in US corporate history, following Lehman Brothers, Washington Mutual, WorldCom and General Motors.

The latest US developments only add to the market's confusion over where exactly the world's biggest economy is headed, analysts said.

"People have been skeptical all along (of the US economy)," said Francis Lun, general manager for Fullbright Securities in Hong Kong. "That's why you have these wild gyrations all over, because you have good figures one day and then bad ones the next day."

Financials retreated in the wake of CIT's bankruptcy.

Mitsubishi UFJ Financial Group Inc., Japan's biggest bank, lost 1 percent, while brokerage Nomura Holdings Inc. fell 2.9 percent. In Sydney, National Australia Bank Ltd. slid 3.3 percent, while HSBC Holdings was down 1.5 percent in Hong Kong.

Concerns about the US outlook and the strong yen hit Japanese exporters, including Sony Corp. The issue plunged 5.6 percent, despite the company reporting a smaller-than-expected 26.3 billion yen (USD 289 million) quarterly loss on Friday.

The Dow fell 249.85, or 2.5 percent, to 9,712.73 on Friday. It ended October with a meager gain of 0.005 percent.

The broader Standard & Poor's 500 index fell 29.92, or 2.8 percent, to 1,036.19, and the Nasdaq composite index dropped 52.44, or 2.5 percent, to 2,045.11.

US markets were headed for a higher open. Dow futures rose 42 points, or 0.43 percent, to 9,706, while S&P futures climbed 5.50, or 0.5 percent, to 1,038.50.

Oil prices were higher after a big fall, with benchmark crude for December delivery up 51 cents to USD 77.51 a barrel. The contract dropped USD 2.87 to settle at USD 77.00 on Friday.

The dollar was trading higher at 89.97 yen from 89.67 yen late Friday. The euro edged up to USD 1.4763 from USD 1.4714.

Bureau Report