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Asia ends off despite Japan bank boost
By Alex Frew McMillan
HONG KONG, China (CNN) -- Asian stocks struggled to a lower close on Monday, with negatives almost across the board. Bank stocks were the main beneficiary of a cabinet reshuffle in Japan. But the moves did little to boost the overall market, where exporters suffered. Japan's Nikkei 225 average rallied slightly in afternoon trade but still ended down 1.54 percent at 9,383.29. The Topix closed off 1.62 percent at 921.05. With the business year running through March in Japan, Monday also marked the end of the first half of the fiscal year. The Nikkei lost 14.9 percent over those six months. Other markets also downThere was a sharp decline in the South Korea, where the market fell more than 2.5 percent. Hong Kong fared only slightly better. The drops were more modest elsewhere in the region, with Australia down just over 1 percent and New Zealand registering a gain. Taiwan fell 0.4 percent, and Singapore is off almost 1 percent heading into the close. In Japan, the market responded warmly to Prime Minister Junichiro Koizumi's first cabinet reorganization since he took office. Surprise move in JapanIn a surprise move, Financial Services Minister Hakuo Yanagisawa was ousted, with Economics Minister Heizo Takenaka taking over his duties.
The rest of Koizumi's economic and financial team remained the same. But Yanagisawa's removal suggests the administration may be moving toward bailing out its troubled banks. (Full story) UFJ Holdings showed the strongest gains among the Big Four banks, putting on 0.94 percent to 323,0000 yen. But most financials surged on the reorganization, coming back from heavy morning losses. Sumitomo Mitsui rose 0.44 percent to 684 yen. Mitsubishi Tokyo Financial Group gained 0.67 percent to 899,000 yen. Mizuho Holdings briefly crossed into positive territory but ended off 0.7 percent at 285,000 yen. The yen strengthened after the cabinet reshuffle to 121.88 in early trade out of Zurich. Exporters off sharplyExporters took it on the chin, Sony Corp. closing off 4.13 percent to 5,110 yen. Japan's manufacturers were reflecting doubts about the strength of their main market, the United States. Carmakers also dipped, with Toyota Motor 3.4 percent lower to 3,130 yen and Honda Motor down 2.57 percent to 4,930 yen. Techs were also lower, with Hitachi down 4.24 percent, Mitsubishi Electric off 3.44 percent and NEC Corp. down 2.33 percent. Japan's industrial output rose 1.6 percent in August from a month earlier. That was below expectations. (Full story) Korea down the most in AsiaIn Korea, the Kospi closed down 2.61 percent at 646.42, the heaviest fall in Asia. Samsung Electronics crunched 3.55 percent lower to 298,500 won, under 300,000 for the first time in eight months.
Fellow electronics maker LG Electronics fared even worse, giving up 8.4 percent to 33,350 won as sentiment turned frosty on consumer-goods makers. Carmaker Hyundai Motor joined the selloff in its Japanese counterparts, dropping 5 percent to 27,900 won. SK Telecom bucked the regional downturn with a 0.85 percent rise to 237,000 won. Government figures show the nation's headline inflation rose a provisional 0.6 percent in September. The CPI spike stems from a jump in food prices due to typhoons and holidays. (Full story) Taiwan better than U.S. techsMost markets held up better than might have been expected, given a 3.7 percent slump in the Dow Jones industrial average from Friday. (Full story) Nasdaq lost 1.84 percent, a decline that spilled over only slightly into Taiwan. The Taiex, which maps U.S. techs closely, fared better than most with a 0.4 percent drop to 4,191.81. TSMC was down 2.14 percent to T$41.10, with smaller chip foundry UMC down 0.42 percent. Both held up better in Taipei than their U.S. listings. Banks were also off, Taiwan's second-largest driver falling 1.57 percent. Australia big caps lowerIn Australia, the S&P/ASX 200 index fell 1.26 percent to 2,970.9. News Corp. was a major drag on the market with a 4.5 percent slump to A$8.79. Other big caps also fared poorly, National Australia Bank giving up 1.2 percent to A$33.48 and Telstra falling 0.4 percent to A$4.74. Insurer AMP lost another 5 percent to A$11.70 after confirming that acting CEO Andrew Mohl would take over the post permanently. (Full story) Qantas lurched 3.2 percent lower to A$3.58, investors showing skittishness about higher oil prices if tension in the Gulf continues. New Zealand's Top 40 was one of the few gainers around the region, locking in a solid 0.65 percent gain to 1,992.11. Wellington's largest listing, Telecom New Zealand, climbed 2.5 percent to NZ$4.92 after U.S. phone company Verizon last week sold most of its 21.5 percent stake to Merrill Lynch. Property off in Hong KongHong Kong came close to matching Korea's heavy selloff, the Hang Seng ending down 2.39 percent at 9,072.21. Property stocks took a beating, Cheung Kong Holdings ending down 4.5 percent at HK$49.20. Sun Hung Kai Properties dropped 4.4 percent to HK$45.80. But gainers were rare in the index, global bank HSBC falling 2.72 percent to HK$80.25. Singapore's Straits Times index is down 0.88 percent at 1,361.76 in late trade, with banks such as DBS Group and United Overseas Bank down. SingTel is about 1.4 percent lower at S$1.39.
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