|
Asia spooked by Greenspan
|
 |
October 15, 1999: 6:28 a.m. ET
Region's markets all stumble after U.S. Fed chief raises red flag
|
LONDON (CNNfn) - Asian stocks suffered a setback Friday after Federal Reserve Chief Alan Greenspan's advice to bankers to cushion themselves against a possible equity downturn sucked the air out of jittery markets. Japan was down 1 percent while Hong Kong fell 1.5 percent and Singapore tumbled 2.5 percent.
Greenspan's remarks, an echo of his 'irrational exuberance' alert nearly three years ago, sent U.S. equity futures contracts into a sharp tailspin and bond yields soaring. Greenspan stressed he was not predicting a crash of U.S. markets.
The U.S. Fed chief's comments added to investors' nervousness after Wall Street's half-percent rebound Thursday from two days of heavy losses appeared less than convincing.
Japan's benchmark Nikkei average ended down 1 percent, or 178.69 points, at 17,601.57. Declines in bank stocks following a recent run-up in the sector also weighed on the market.
Traders were also cautious ahead of Friday's release of the U.S. producer price index, one of several closely-watched barometers of inflation. Underscoring the equity jitters, the yield on the 30-year U.S. Treasury bond vaulted to 6.32 percent Thursday - a two-year high.
The dollar fell on Greenspan's remarks. The U.S. currency, which had been trading around 107.36 yen late Thursday in New York, had slipped more than a full yen to around 106.25 yen by late Friday in Tokyo. The euro was trading at 114.91 yen, down from . from its level of 115.60 yen late Thursday.
In Hong Kong, Greenspan's remarks also hit the Hang Seng. The leading gauge finished down 1.5 percent, or 187.74 points, at 12,299.08 as selling accelerated ahead of the launch of the first tranche of a large government index-tracking fund, set for Oct. 25.
Hong Kong traders have been on edge all week amid a wave of new share placements and the government's planned public offering of shares amassed during its market intervention last year. On Friday, Chinese oil giant CNOOC Ltd., said it was postponing a massive $2.2 billion to $2.5 billion offering, citing adverse market conditions.
Investors in Hong Kong also hugged the sidelines ahead of a holiday Monday in the territory.
Among other big-market casualties of the Greenspan comments: Singapore's Straits Times Index shed 2.43 percent to close at 2,061.25 by late Friday as traders feared a possible downturn on Wall Street that could spill over to Asia.
Australia's All Ordinaries finished down 1.3 percent at 2,862.3, its lowest level since February, browbeaten by interest rate woes and fears of Wall Street wobbliness. Late program sales erased early gains in South Korea, where the Kospi closed down 0.4 percent at 862.63.
Manila shares ended nearly 1.5 percent lower, weighed down by a 7.14 percent drop in index heavyweight Metropolitan Bank and Trust Co. amid uncertainty over rumors of its tie-up with Far East Bank and Trust Co. Taiwan snapped a four-session winning streak, slipping 0.8 percent, though Greenspan's comments were seen as having only a limited impact.
Jakarta finished flat at 567.918 amid fears of civil unrest ahead of the country's presidential election next Wednesday. Malaysia shares tumbled 2.3 percent, while Thailand's SET index gave up nearly 2 percent.
Greenspan issued his comments at a vulnerable time for world markets, following a fragile rebound on Wall Street overnight after two days of heavy losses.
On Thursday, the Dow Jones industrial average finished 0.53 percent, or 54.45 points higher after tumbling 4 percent in the two previous sessions amid worries over inflation, rising bond yields and the next direction in U.S. interest rates.
On the corporate front, banks in Tokyo succumbed to selling pressure on the heels of recent gains. Sumitomo Bank and Sakura Bank both lost ground a day after announcing plans to merge to create the world's second-largest bank. Sakura gave up 8.5 percent to 915 yen, while Sumitomo eased 1.33 percent to 1,712 yen. Another recent high-flyer, Mitsui Trust and Banking Co. shed 13.4 percent to 265 yen.
In Hong Kong, Pacific Century CyberWorks tumbled 7.38 percent to close at HK$5.65 after saying Friday it had spent about $600 million on acquisitions and investments. China Telecom ended down 1.4 percent at HK$24.75 ahead of a major fund-raising exercise next week.
Index heavyweight HSBC fell 1.74 percent to HK$84.75.
--from staff and wire reports
|
|
|
|
|
 |
|
