Transport leads investors to a 2-year tumble

By Chen Shiyin  |   2008-8-5  |     NEWSPAPER EDITION

ASIAN stocks fell yesterday to the lowest in almost two years, led by transport companies, after Nissan Motor Co's earnings dropped and Daewoo Shipbuilding & Marine Engineering Co said a customer canceled an order.

Nissan, Japan's No. 3 car maker, declined the most in more than four months. Olympus Corp slumped after profit decreased the most in almost three years. Daewoo Shipbuilding led losses in Seoul on concern that slowing growth may prompt more customers to scrap ship purchases, ending five years of record orders for shipyards. BHP Billiton Ltd retreated after copper sank the most in three weeks.

"We expect corporate earnings to stay weak for the rest of 2008 in Asia," said Diane Lin, Sydney-based portfolio manager at Pengana Capital, which oversees about US$1.9 billion. Exporters "such as Japanese and Korean automakers will see a challenging second half," she said.

The MSCI Asia-Pacific Index lost 1.6 percent to 128.50 in Tokyo yesterday, adding to its 1.3-percent decline on August 1. About five stocks retreated for every two that gained on the index, which was set for its lowest close since October 4, 2006.

Japan's Nikkei 225 Stock Average fell 1.2 percent to 12,933.18, its lowest close since July 18. China's mainland CSI 300 Index retreated 2.4 percent. Most other Asian stock markets dropped.

Yamaha Corp slumped in Tokyo by the most in almost four years after Goldman Sachs Group Inc cut its rating on the Japanese maker of musical instruments. Lend Lease Corp plunged in Sydney by the most in seven and a half years after the developer's profit dropped because of writedowns in the United Kingdom.

Standard & Poor's 500 Index futures lost 0.3 percent yesterday. United States stocks fell last Friday, adding to two months of losses for the S&P 500, after the US Labor Department said the jobless rate climbed to 5.7 percent last month.