Tokyo hit as Moody’s lowers outlook; Wellington absorbs earthquake
By V. Phani Kumar, MarketWatch , Colin Ng and John Phillips
HONG KONG (MarketWatch) — Asian equities took a beating Tuesday as investors sold down stocks across the region on worries about raging political tensions in the Mideast and North Africa.
Japanese stocks were hammered down as selling pressure mounted after Moody’s Investors Service lowered the nation’s ratings outlook, while New Zealand shares and currency skidded after an earthquake in the country’s second-largest city of Christchurch.
“International turmoil in the Mideast and the Dow [Jones Industrial Average] being closed for an extra day have seen European markets lead the way with falls [Monday] and that is affecting sentiment,” said Craigs Investment Partners broker Bryon Burke in New Zealand.
U.S. markets were shut Monday for the Presidents Day holiday.
Japan’s Nikkei Stock Average (JP:NI225 10,665, -192.83, -1.78%) gave up 1.8%, China’s Shanghai Composite (CN:SHCOMP 2,856, -76.73, -2.62%) sank 2.6%, Hong Kong’s Hang Seng index (HK:HANGSENG 22,991, -494.61, -2.11%) lost 2.1%, Australia’s S&P/ASX 200 (AU:XJO 4,857, -43.32, -0.88%) fell 0.9%, South Korea’s Kospi dropped 1.8% and Taiwan’s Taiex shed 1.9%.
Dow Jones Industrial Average (DJIA 12,391, +73.11, +0.59%) futures tumbled 130 points in screen trade, pointing to a likely sharp fall on Wall Street.
The political crisis in Libya appeared to be worsening in the face of mounting violence against pro-democracy protesters, amid reports Libyan security forces had fired on demonstrators from war planes and helicopters.
Crude-oil prices soared on the news, raising worries about the impact on some countries struggling to battle weak domestic economic conditions.
April Nymex futures jumped $8.09 to $97.80 per barrel on Globex. Spot gold dropped $6.60 to $1,400 a troy ounce.
“Libya is the first major oil exporter to be engulfed by the crisis and the first to see significant disruption to oil production,” Julian Jessop, economist at Capital Economics, wrote in a note. “An additional $10 per barrel on the price of oil is still significant, particularly for those weaker economies in Europe facing a major fiscal squeeze. But for the global economy as a whole, it is just about manageable.”
Airlines around the region were spooked as oil prices climbed, with All Nippon Airways Co. (JP:9202 303.00, -8.00, -2.57%) (ALNPY 7.39, +0.11, +1.51%) losing 2.6% in Tokyo, Cathay Pacific Airways (HK:293 18.08, -0.98, -5.14%) (CPCAY 12.59, +0.04, +0.32%) stumbling 5.1% in Hong Kong, Air China (CN:601111 11.79, -0.63, -5.07%) (AIRYY 20.95, +0.20, +0.96%) falling 5.1% in Shanghai, China Airlines skidding 4.7% in Taipei and Qantas Airways (QUBSF 2.52, +0.01, +0.40%) (AU:QAN 2.46, -0.05, -1.99%) losing 2% in Sydney.
In afternoon trade, Thai Airways International sank 6.9% and Singapore Airlines (SG:C6L 14.00, -0.34, -2.37%) (SINGY 22.68, +0.59, +2.67%) gave up 2.4%.
Energy-sector shares fared relatively better, with Woodside Petroleum (WOPEY 43.20, -0.20, -0.46%) (AU:WPL 42.64, +0.06, +0.14%) rising 0.1% in Sydney and Japan Petroleum Exploration Co. (JPTXF 0.00, 0.00, 0.00%) (JP:1662 4,015, +10.00, +0.25%) rising 0.3%, while Cnooc (CEO 219.82, -1.33, -0.60%) (HK:883 17.80, +0.22, +1.25%) rose 1.3% in Hong Kong.
In Mumbai, heavyweight Reliance Industries (IN:500325 985.05, +28.55, +2.98%) jumped 3.0% to support a downbeat market, a day after announcing that BP PLC. (UK:BP. 486.50, -4.85, -0.99%) (BHP 92.39, -1.54, -1.64%) will pay the Indian company $7.2 billion for interests in 23 oil and gas blocks. The benchmark Sensex (XX:SENSEX 18,296, -142.15, -0.77%) fell 0.8%, however, as most of its other constituents declined; leading the fall, Hero Honda Motors (IN:500182 1,391, -48.30, -3.36%) lost 3.6%, while Tata Motors (TTM 26.40, -0.67, -2.48%) (IN:500570 1,137, -24.60, -2.12%) gave up 2.1%.
Japanese shares lost ground as major banks as well as a number of exporters declined after Moody’s changed its outlook on Japan’s Aa2 rating to negative from stable, citing “heightened concern that economic and fiscal policies may not prove strong enough to achieve the government’s fiscal-deficit-reduction target and contain the inexorable rise in debt.”
