Lower earnings send Asian markets down

By Patrick Rial  |   2008-8-8  |     NEWSPAPER EDITION

ASIAN stocks fell yesterday after banks, airlines and shipping companies reported lower earnings on slowing economic growth and increases in raw-material costs.

Mitsubishi UFJ Financial Group Inc slumped for a second day after writedowns at American International Group Inc exceeded forecasts. Neptune Orient Lines Ltd plunged to the lowest level in more than a year in Singapore after its first profit decline in five quarters. Hong Kong's Cathay Pacific Airways Ltd dropped as higher fuel costs wiped out earnings.

"Asian earnings momentum will be lackluster for the time being with a slower US economy, slower exports and higher costs," said Christian Jin, who oversees US$1.2 billion as head of global investment at CJ Asset Management Co in Seoul. "There are still a lot more writedowns to come, so financials will struggle."

The MSCI Asia Pacific Index lost 0.7 percent to 128.18 as of 5:49pm in Tokyo. Japan's Nikkei 225 Stock Average slipped 1 percent to 13,124.99. South Korean shares lost 0.9 percent, led by Samsung Electronics Co, as the nation's central bank unexpectedly raised interest rates to curb accelerating inflation. Thailand's shares posted the biggest increase in the region, with the benchmark index rising 4.1 percent, Bloomberg News reported.

Mitsubishi UFJ fell 3.9 percent to 869 yen (US$7.94), the lowest level since March 31. Japan's biggest publicly traded bank on Tuesday reported a 66-percent slump in net income for the first quarter.

Neptune Orient Lines, Southeast Asia's largest container shipping firm, fell 8.4 percent to S$2.52 (US$1.82). Mitsui O.S.K. Lines Ltd, Japan's second-biggest bulk shipper, lost 2.6 percent to 1,275 yen.

Cathay Pacific, Hong Kong's biggest airline, fell 3.9 percent to finish at HK$14.16 (US$1.81) after recording its first loss in five years.