Jan. 8 (Bloomberg) -- Asian stocks declined, wiping out the benchmark index’s 2009 gains, as the deepening global recession reduced profits and drove down oil and metals prices.
Lenovo Group Ltd. plunged 26 percent after China’s biggest personal-computer maker forecast its first loss in 11 quarters. Macquarie Group Ltd., Australia’s biggest securities firm, slid 3.7 percent after saying “exceptionally challenging” conditions will erode earnings. Cnooc Ltd. lost 6.7 percent in Hong Kong after crude fell the most in more than seven years yesterday, while BHP Billiton Ltd. sank 5.7 percent.
“The slowdown in the global economy has been faster than expected,” said Grace Tam, Hong Kong-based vice president of investment services at JPMorgan Asset Management Ltd., which manages about $1.1 trillion. “We expect that there will be more disappointing earnings results.”
The MSCI Asia Pacific Index dropped 3.2 percent to 89.43 as of 5:33 p.m. in Tokyo, the biggest decline since Dec. 12 and driving the gauge down 0.3 percent this year. The index posted a record 43 percent slump in 2008. About seven stocks fell for each that rose today, with commodity producers and technology companies leading declines.
Japan’s Nikkei 225 Stock Average slumped 3.9 percent to 8,876.42, snapping a seven-day winning streak that was the longest stretch of gains in almost three years, as oil explorer Inpex Corp. plunged. All other indexes in the region dropped.
Taiwan Slumps
Bank of China Ltd. led a retreat in Hong Kong after billionaire Li Ka-shing sold shares in the lender at a discount to yesterday’s closing price. Taiwan’s Taiex index slid 5.3 percent, the most in two months and Asia’s biggest slump, as weaker sales by Intel Corp. and a record decrease in exports spurred declines in Taiwan Semiconductor Manufacturing Co and Hon Hai Precision Industry Co.
India’s stock markets, which plunged the most in more than two months yesterday after Satyam Computer Services Ltd. revealed falsified accounts, were shut for a public holiday.
In the U.S. the Standard & Poor’s 500 Index fell 3 percent yesterday as a private report showed U.S. employers cut more jobs than estimated in December. Futures on the S&P 500 slipped 0.3 percent in trading today.
Lenovo, the world’s No. 4 maker of PCs, sank 26 percent to HK$1.91, the steepest slide since 1998, after saying it’s cutting about 2,500 jobs, 11 percent of its payroll, and will probably post a loss for the latest quarter as the global recession reduces demand for its products.
Intel, whose chips run about 80 percent of the world’s personal computers, said yesterday fourth-quarter sales dropped 23 percent, steeper than a November projection. Intel’s dominance of the processor market makes it a bellwether for technology spending, since its chips are among the first components ordered by computer manufacturers.
TSMC, Hon Hai
In Tokyo, Advantest Corp., the world’s biggest maker of equipment used to test computer memory chips, retreated 12 percent to 1,439 yen.
Taiwan Semiconductor, the world’s largest contract chipmaker, slumped 6.7 percent to NT$41.55 wiping out this year’s gains. Hon Hai, the world’s largest contract electronics manufacturer, lost 6.9 percent to NT$66.3, snapping a five-day, 11 percent advance.
Taiwan’s exports slid by a record 41.9 percent in December on weaker demand from the U.S. and China for laptops, mobile phones and computer chips. The island’s central bank cut borrowing costs to the lowest level since 2004 following the data.
Concern that economic conditions are worsening eclipsed optimism that interest-rate reductions and spending plans by central banks from India to Australia would be enough to pull the world economy out of recession and revive demand for products from electronics to oil. That confidence led MSCI’s Asian index to gain 8.4 percent in December, the first advance in eight months.
Job Losses
“We’ve seen strong rallies on hopes that all the stimulus spending will start to kick in,” said Nader Naeimi, a Sydney- based senior investment strategist at AMP Capital Investors, which manages about $85 billion. “The fact that unemployment is picking up creates nervousness, and shifts the focus back onto the broader economic challenges.”
U.S. companies cut an estimated 693,000 jobs in December, according to ADP Employer Services, the most since the survey began in 2001. The decline was larger than the 495,000 drop estimated by economists in a Bloomberg survey.
Cnooc lost 6.7 percent to HK$7.37. Inpex, Japan’s biggest oil explorer, slumped 9 percent to 679,000 yen. BHP, the world’s largest mining company, declined 5.7 percent to A$30.75. Jiangxi Copper Co., China’s second-biggest smelter of the metal, plunged 12 percent to HK$6.41, the steepest fall since Oct. 27.
Oil, Copper
Crude oil for February delivery plummeted 12 percent to $42.63 a barrel in New York yesterday, the steepest drop since September 2001. Copper futures fell 4.5 percent yesterday and a measure of six metals traded in London slid 2.1 percent.
Bank of China, the nation’s third-largest bank by market value, retreated 8.4 percent to HK$1.96. Hong Kong’s Li sold a stake in the company worth $511 million at a 7.5 percent discount to yesterday’s closing price. Royal Bank of Scotland Group Plc is considering selling its $3 billion holding in the company as well, the Financial Times reported.
Bank of America Corp. unloaded $2.8 billion of China Construction Bank Corp. stock yesterday. Selling restrictions on investments in Chinese banks are expiring, prompting some investors to exit their positions.
Macquarie fell 3.7 percent to A$32.50. The bank said a “challenging” market is hurting profitability and announced a A$1.5 billion ($1.07 billion) sale of margin loans to a regional lender.
Cathay Pacific Airways Ltd., Hong Kong’s largest carrier, lost 7.6 percent to HK$8.97, the most in two months, after saying it had fuel hedging losses of HK$7.6 billion ($980 million).
Mitsubishi Motors Corp., the maker of the i MiEV electric vehicle, added 3.6 percent to 144 yen after saying it may supply Peugeot Citroen Group with the next-generation car, which was originally reported by the Nikkei newspaper.
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