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HONG KONG, July 1: Asian stocks closed mostly down on Tuesday, with China and India tumbling, as soaring oil prices and a huge rise in iron ore costs stoked fears about the economic damage from surging inflation.
The Indian market plunged over 3.7 per cent, while Chinese stocks slid just over three per cent, as this year’s sell-off in Asian equities continued amid concerns the commodity boom threatens to choke economic growth.
Crude oil traded around 141 dollars per barrel on Tuesday, rising back towards record levels of just under 144 dollars struck at the start of the week.
Meanwhile, Anglo-Australian mining giant Rio Tinto said it had reached agreement with all its customers in Asia for huge iron ore price increases of up to 97 per cent.
Both the oil price and news of Rio’s deal intensified existing concerns that rising inflation threatens consumer spending, business profits and economic growth, particularly if interest rates go up to tame prices.
Among other markets, Japan closed little changed, while Australia, Taiwan and Singapore all tumbled around 1.5 per cent.
The Japanese bourse held up despite a central bank survey showing top Japanese executives are at their most pessimistic in almost five years.
South Korea was also in the red, and most of Asia’s smaller markets fell too. But resource-rich Indonesia managed to buck the trend, rising 1.3 per cent, while the bourses in Hong Kong and Thailand were shut.
Apart from inflation, investors were also worried about the fallout from the credit crisis in the ailing US economy, the world’s biggest.
TOKYO: Japanese share prices closed down 0.13 per cent, declining for a ninth straight session following news of a sharp drop in business confidence in Asia’s largest economy, dealers said.
The Tokyo Stock Exchange’s benchmark Nikkei-225 index dropped 18.18 points or 0.13 per cent to end at 13,463.20. The broader Topix index of all first-section shares slipped 0.03 points to 1,320.07.
Analysts said that soaring costs, slowing global economic growth and a stronger yen were all squeezing profits and hitting confidence
Rising crude prices are on everyone’s mind for now, Masaru Ohnishi, a market strategist at JPMorgan, told Dow Jones Newswires.
SYDNEY: Australian share prices dropped 1.5 per cent, dealers said.
The benchmark S&P/ASX 200 shed 76.4 points to close at 5,138.9 while the broader All Ordinaries was down 71.8 points at 5,261.1.
Turnover was 1.72 billion shares worth some 5.3 billion dollars (5.1 billion US).
I think there was a backlog of selling Aequs senior institutional trader Ric Klusman told Dow Jones Newswires. There’s no real buying and that’s going to continue for the next 18 months ”ANZ dropped 5.1 per cent to 17.77 dollars. Miner BHP Billiton gained 1.6 per cent to $44.40.
Rival Rio Tinto rose 1.5 per cent to 137.50 dollars after announcing it had reached agreement with all its customers in Asia for iron ore price increases of up to 97 per cent.
Australian airline Qantas added 6.6 per cent to 3.24 dollars after raising the prospect of listing about 40 per cent of its frequent flyer programme later this year.
SINGAPORE: Singapore share prices closed 1.38 per cent lower, dealers said.
The blue chip Straits Times Index (STI) fell 40.75 points to 2,906.79 on slim volume of 873 million shares worth 1.03 billion dollars (757 million US).
The STI currently still lacks the catalyst to reverse from the latest slide that started from 3,270 in early May. We are closer to a low, but not nearly there yet,” DBS Vickers said.
DBS dropped 12 cents to 18.74 Singapore dollars. CapitaLand was a key blue chip loser, down 13 cents at 5.57. Singapore Airlines dropped 10 cents to 14.60.
KUALA LUMPUR: Malaysian share prices closed down 1.0 per cent, dealers said.
The Kuala Lumpur Composite Index dropped 11.74 points to 1,174.83.
Investors are turning cautious and are likely to remain on the sidelines amid current political uncertainty, one dealer told Dow Jones Newswires.
Malaysia’s political scene is in turmoil this week, with fresh sodomy allegations being levelled at opposition leader Anwar Ibrahim, who has claimed he is the victim of a conspiracy to prevent him from seizing power.
Commerce Bank was 5.0 per cent weaker at 7.60 ringgit, and Public Bank was down 1.9 per cent at 10.20 ringgit.
JAKARTA: Indonesian shares closed 1.3 per cent higher, dealers said.
The Jakarta Composite Index rose 29.70 points to 2,378.80.
Bargain buying occurred across the board after the much feared inflation data came out,” a trader told Dow Jones Newswires.
Year-on-year inflation in June hit 11.03 per cent on the back of 30 per cent government hike in the price of fuel in May, but fell below predictions by economists of more than 12.5 per cent.
Top gainers included Bank Rakyat, which rose 3.9 per cent at 5,300 rupiah.
WELLINGTON: New Zealand share prices closed 0.61 per cent lower, dealers said.
The NZX-50 gross index fell 19.34 points to close at 3,175.27.
A lack of corporate news, I feel, and probably some negative economic commentary is weighing on investors’ minds at the moment, said Grant Williamson of Hamilton Hindin Greene.
Telecom fell 12 cents to a 15-year low of 3.45 dollars, while Fletcher Building was down eight cents at a three-year low of 6.27.
MUMBAI: Indian shares closed down 3.71 per cent, dealers said.
The benchmark Mumbai 30-share Sensex index fell 499.92 points to 12,961.68, a 14-month low.
Political uncertainty and rising inflation are dragging the markets down.—AFP
