Most Asian markets sink as Malaysian stocks slide 9.5 percent, Nikkei at 2 1/2-year low

The Associated Press , Kuala Lumpur | Mon, 03/10/2008 10:11 PM | Business

Most Asian markets sank Monday, with Tokyo's market falling to a 2 1/2-year low and Malaysia's benchmark index plunging 9.5 percent after the ruling party's electoral losses over the weekend.

Stocks in mainland China, Taiwan, Indonesia and the Philippines also dropped sharply, dragged down by local concerns and jitters about the U.S. economic slowdown.

Among major markets, only Hong Kong advanced.

Investors in Malaysia dumped shares of government-linked construction stocks after Prime Minister Abdullah Ahmad Badawi's National Front lost its two-thirds parliamentary majority in Saturday's general elections.

The Kuala Lumpur Composite Index tumbled 10 percent, triggering an automatic one-hour suspension of trading. It recovered slightly after trading resumed but still ended the day down 9.5 percent at 1,173.22.

Investors across much of Asia were spooked by figures released Friday showing U.S. employment fell in February at its fastest rate in five years, suggesting the housing and credit crunch is gripping the broader economy.

In Tokyo, the Nikkei 225 stock average tumbled 250.67 points, or 1.96 percent, to 12,532.13 points, its lowest since September 2005.

Japanese mining and trading companies, including Sumitomo Metal Mining and Itochu Corp., were among the hardest hit.

Traders said the drop in the market might have been worse if Japan's machinery orders, often used to gauge the outlook of business investment, had been weaker. Core machinery orders jumped 19.6 percent in January from February, the biggest gain in seven years - although analysts were wary about their outlook because the gain was due to one-off factors.

Hong Kong's market bucked the trend, with a recovery in afternoon trading driven by bargain-hunting and gains banking giant HSBC. The Hang Seng Index rose 203.72 points, or 0.9 percent, to 22,705.05.

On the Chinese mainland, stocks fell to a seven-month low as investors sold on worries over a possible interest rate hike to counter inflation and over slower growth in corporate earnings.

The benchmark Shanghai Composite Index tumbled 3.6 percent or 154.21 to 4,146.30, its lowest close since July 20.

China's inflation data for February is forecast to rise to 7.8 percent from a year earlier, the fastest increase in 11 1/2 years, strengthening expectations of a possible interest rate hike, analysts said.

Elsewhere, Philippine shares fell to a seven-month low, hurt by worries over the U.S. economic slowdown and spiraling local inflation. The Philippine Stock Exchange Index dropped 119.85 points, or 4 percent, to end at 2,908.88.

In Taiwan, the Weighted Price Index of the Taiwan Stock Exchange lost 232.01 points, or 2.72 percent, to 8,299.37. India's stock market recouped much if its early losses. The Sensex closed down 0.3 percent at 15,923.72.

In currency trading, the dollar fell to 102.00 yen from 103.09 yen late Friday afternoon in New York. The euro rose to US$1.5382, from US$1.5335. (****)

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