Monday, August 22, 2011

DOWN..............DOWN...........DOWN...Asian stock markets lower amid US recession fears

Asian stock markets lower amid fears US economy is slipping back into recession

A woman and a man are reflected on the window of a stock price monitor at a securities company in Tokyo Monday, Aug. 22, 2011. Asian and Pacific stocks were down slightly Monday following last week's worldwide slide as investors sought out safe havens.

Asian markets were the first to open after the developments in Libya, where the apparent crumbling of Moammar Gadhafi's regime as rebels entered the capital of Tripoli on Sunday is likely to affect oil prices. (AP Photo/Hiro Komae)

Pamela Sampson, AP Business Writer, On Monday August 22, 2011, 1:18 am EDT
BANGKOK (AP) -- Asian stocks gave up early gains and fell Monday as fears that the U.S. is slipping back into recession caused investors to dump riskier assets.

Brent crude fell to near $106 a barrel as Libyan rebels captured most of Tripoli, boosting hopes the OPEC nation's oil exports could resume soon. The dollar was stronger against the yen and the euro.

Hong Kong's Hang Seng fell 0.9 percent to 19,219.65 and South Korea's Kospi dropped 0.5 percent to 1,736.18. Benchmarks in Taiwan, Singapore, mainland China and Indonesia were also lower.

Japan's Nikkei 225 dropped 0.4 percent to 8,686.11 as a persistently strong yen rattled nerves. A strong yen hurts exports by making them more expensive.

Japan intervened in currency markets earlier this month to try to reverse the yen's climb. The decision to sell the yen and buy the dollar worked initially, sending the greenback toward 80 yen. But the dollar has been weighed down by the dimming outlook for U.S. economy and is back down to mid 76-yen levels.

Toyota Motor Corp. dropped 2.1 percent. Nissan Motor Corp. slid 2.8 percent.

Investors will be on edge this week as they scrutinize new data on the U.S. economy. But the most anticipated event will be a speech by Federal Reserve Chairman Ben Bernanke at a retreat in Wyoming.

The Fed pledged earlier this month to keep interest rates super-low through mid-2013. Investors hope Bernanke will announce, or at least preview, further steps to help the economy including a third round of bond purchases known as quantitative easing.

"I think Ben Bernanke's meeting in Jackson Hole will be very much in focus here," said Tom Kaan, head of equity sales at Louis Capital Markets in Hong Kong. The consensus is that a third round of quantitative easing will come in some form, he said.

"The world is in a very dire situation at the moment," Kaan said. "People will react. Most of that reaction will come from fear."

Fears that European banks may be headed for huge losses on government bonds have caused investors to unload banking shares in Europe and elsewhere.

China Construction Bank Ltd., the country's third-biggest commercial lender, was down 2.3 percent despite announcing that its first half profit rose 31 percent from a year earlier. The Industrial and Commercial Bank of China, the world's biggest bank by market value, lost 2.1 percent. Japan's Mizuho Financial Group fell 2.6 percent.

Lackluster earnings and anticipation of further moves to cool China's property sector to counter inflation hurt mainland China property companies and Hong Kong developers. Hong Kong-listed China Resources Land tumbled 13.6 percent and China Overseas Land & Investment dropped 6.2 percent. Anhui Conch Cement plummeted 10.6 percent.

Meanwhile, Samsung Electronics Co. rose 3.1 percent and LG Electronics was 1.1 percent higher after a report showed the two South Korean companies dominated the global TV market in the second quarter of the year, according to Yonhap News agency.

According to the report by U.S.-based market research firm DisplaySearch, Samsung was the global brand leader with a share of 22.6 percent in terms of value of the units sold. LG came in second.

Asian markets were the first to open after the developments in Libya, with the apparent crumbling of Moammar Gadhafi's regime after rebels entered the capital of Tripoli on Sunday. Oil prices are expected to fall if the situation can quickly stabilize.

Libya used to export about 1.5 million barrels of oil a day, but production all but ground to a halt in recent months as rebels battled to overthrow Gadhafi.

Stocks in the U.S. fell Friday to end a fourth straight week in the red, amid fears the U.S. economy is headed toward another recession. The Dow Jones industrial average lost 172.93 points, or 1.6 percent, to close at 10,817.65. Since July 21, the Dow has fallen about 15 percent.

The dollar hit a new post-World War II low against the Japanese yen Friday as investors flocked toward safety. The dollar fell as low as 75.94 yen in New York before rebounding to 76.48 later. On Monday, the dollar rose to 76.71 yen.

The euro, meanwhile, fell to $1.4367 from $1.4387 on Friday.

Benchmark oil for September delivery was down 25 cents to $82.01 a barrel in electronic trading on the New York Mercantile Exchange. Crude fell 12 cents to settle at $82.26 on Friday.

In London, Brent crude for October delivery was down $2.56 per barrel to $106.06 on the ICE Futures exchange.