Asian market suffers from global slump

By Chen Shiyin  |   2008-7-19  |     NEWSPAPER EDITION

ASIAN stocks fell yesterday, driving the region's benchmark index to its fifth weekly decline in six, as the weakening global economy drags down profits.

Wipro Ltd, India's third-largest software-services provider, slumped after reporting lower-than-estimated earnings as international customers scaled back orders. Posco, Asia's third-biggest steel maker, sank after Nucor Corp, the largest United States producer, forecast profit that trailed analyst predictions. CNOOC Ltd, China's largest offshore oil producer, declined as oil prices headed for their worst week in three years, Bloomberg News reported.

"Growth is slowing and not just in the US," said Daphne Roth, Singapore-based vice president of equity research at ABN Amro Private Bank. "A lot of money has been put into the commodities space and with the underlying demand slowing, it makes sense to exit."

The MSCI Asia-Pacific Index lost 1.1 percent to 129.42, taking its weekly drop to 3.1 percent. All 10 of its industry groups declined. The benchmark gauge, which is set to close at its lowest since October 2006, has lost 18 percent this year as mounting credit market losses and soaring raw material prices raised concern that global economic growth will slow.

Japan's Nikkei 225 Stock Average fell 0.7 percent to 12,803.70, led by Fanuc Ltd and Sony Corp Benchmark indexes in nine of the region's 14 major markets declined, with Taiwan's Taiex Index dropping 2.3 percent, the region's biggest retreat.

Standard & Poor's 500 Index futures fell 0.9 percent yesterday as Merrill Lynch & Co and Microsoft Corp reported earnings that missed analyst estimates after regular trading hours ended.

US stocks climbed yesterday, sending the Dow Jones Industrial Average to its best two-day gain in almost six years as JPMorgan Chase & Co reported better-than-estimated profit.

Indian technology shares fell after Wipro reported first-quarter profit of 8.14 billion rupees (US$191 million).