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Seoul leads Asia down on oil nerves
Staff and wires
SYDNEY, Australia -- Higher oil prices drove Asian markets to a lower close Monday, with Seoul's Kospi off a sharp 3.5 percent to 679.43, a seven-week low. Japan's financial markets were closed Monday for the autumn equinox public holiday. South Korea was closed last Friday. Australia, New Zealand, Hong Kong, Singapore and Taiwan all ended firmly in the red, though their falls were not as severe as those of Korea, which relies heavily on imported oil. Taiwan lost almost 2.3 percent.
In electronic trade in Asia Monday, war fever drove U.S. oil prices to a 19-month high of $30.45 a barrel on the growing prospect of a U.S. assault on Iraq. (Full story) In Seoul, a broad-based retreat saw market heavyweight Samsung Electronics dip 4 percent to 321,500 won. Investor favorite SK Telecom lost 2.4 percent to 226,500 won. The country's biggest automaker Hyundai, which reached agreement with DaimlerChrysler last week on a joint truck venture, finished down about 3 percent to 31,950 won. (Full story) Big steelmaker Posco was one of the heaviest losers, down 6.8 percent to 110,000 won. In Australia, the benchmark S&P/ASX 200 index lost 26.9 points or 0.88 percent to 3046.7 on concerns about the U.K. capital position of the country's largest life insurer and funds manager, AMP. Also weighing on the market was a downbeat report on the impact of drought on Australia's agricultural production. (Full story) New low for AMP
AMP emerged from Friday's trading halt to be down another 3.6 percent by the close Monday, at a fresh low of A$11.41, off 43 cents. At one point in the morning it touched A$11.25. (Full story) Late on Friday AMP told the Australian Stock Exchange that it needed to make another £500 million ($775 million) available to support its Pearl fund in the U.K. That is on top of a A$1 billion ($550 million) injection earlier this year. Media group News Corp, telco Telstra and resources major BHP Billiton also lost ground as part of a broad-based decline. News Corp, the market's biggest stock, tumbled 3.5 percent to A$9.08, BHP Billiton lost 1.64 percent to A$9.01 and Telstra fell 1.26 percent to A$4.69. An unconfirmed report in the Australian Financial Review says the federal government is considering selling all of its 50.1 percent holding in Telstra in one hit next year, instead of the expected three-stage selloff between 2003 and 2005. Among the big four banks, National Australia Bank and Commonwealth Bank moved against the tide to make small gains. New Zealand's Top 40 finished 0.67 percent lower at 2006.9. Telecom NZ was off 3 cents to NZ$4.79. Singapore, Taiwan, HK slip
In Singapore, the Straits Times is 0.71 percent lower to 1410.89 heading towards the close. Most bluechips are either flat or slightly lower. SingTel is down 1.36 percent to S$1.45 and DBS Bank is off 1.6 percent to S$12.10. Singapore Airlines is up about 1 percent. Taiwan's Taiex followed South Korea down, dipping 2.28 percent to 4328.40. The big losers were in the industrial sector, with Formosa Plastic off almost 7 percent to T$33.60 and Nan Ya Plastic down by a similar amount to T$28.10. Plastic prices have slipped in recent weeks. The market's biggest stock, chip foundry TSMC, closed 3.2 percent lower at T$42.10 and smaller rival UMC lost 1.25 percent to T$23.70.. Hong Kong's Hang Seng index lost 0.14 percent to 9314.87 after a late rally. It was dragged down earlier by falls in conglomerate Hutchison Whampoa, mobile phone twins China Mobile and China Unicom and property giant Sun Hung Kai Properties. Computer maker Legend was a rare gainer, up almost 1 percent to HK$2.775. Among oil stocks, Sinopec and offshore oil and gas producer CNOOC are flat, while Petrochina is up 1.2 percent to HK$1.64. China also depends heavily on daily crude deliveries from the Middle East. (Full story) Fed meets TuesdayGlobally, financial markets are expected to tread water ahead of the U.S. Federal Reserve rate-setting meeting on Tuesday. The Fed's risk assessment is likely to tilt further towards economic weakness, although the key federal funds rate is widely expected to be left at 1.75 percent. On Wall Street, the key indices closed in positive territory on Friday but logged their fourth negative week in a row after profit warnings from Electronic Data Systems, financial giant J.P. Morgan Chase and others. For the week, the Dow slipped 3.9 percent and the Nasdaq lost 5.5 percent. (Full story) Reuters contributed to this report.
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