Most Asia markets fall after new oil high

The Associated Press ,  Hong Kong   |  Mon, 06/30/2008 6:54 PM  |  Business

Most Asian markets fell Monday as Japanese stocks sank for an eighth day and China's market wrapped up a dismal month in which its most-watched index fell 20 percent.

Tokyo's Nikkei 225 shed nearly 0.5 percent to 13,481.38, while in China, the Shanghai Composite Index dipped 0.5 percent to 2,736.10 points.

Markets in Taiwan, Singapore, India, South Korea and Australia also retreated, though Hong Kong's market managed to advance.

Across the region, there was little to cheer investors after crude oil prices hit yet another record of nearly US$43 a barrel on Friday. In early European trading Monday, oil hit a new high of
US$143.67.

In Japan, a falling dollar added to anxiety, hurting exporters including automakers and electronics manufacturers.

Dire projections for a closely-watched business sentiment survey, to be released Tuesday, also spoked investors. Analysts predict that Bank of Japan's quarterly "tankan" survey will reflect growing corporate concerns about business conditions.

Fuji Heavy Industries Ltd., maker of Subaru-brand cars, slid 4.6 percent. Toyota Motor Corp. Japan's largest automaker Toyota Motor Corp. was down 1.2 percent

Sony Corp. plunged 4.1 percent, its lowest level in almost two months.

Among gainers, issues in the oil and coal products sector strengthened on higher crude futures.

Australia's key index fell 1.7 percent to 5,215.3, while India's Sensex tumbled almost 2.5 percent to 13,461.60. In Manila, the Pilippines' main index dipped 0.3 percent to 2,459 to its lowest in nearly two years.

Mainland Chinese shares continued their slump.

Corporate profits have been growing strongly amid a boom that saw the economy expand by 10.6 percent in the first quarter. But after a sharp runup in stocks last year, instors have been rattled by record-high oil prices, their possible impact on profits and warnings Beijing might hike interest rates to cool inflation that is near 12-year highs.

The main Shanghai index has lost 55 percent since its peak on Oct. 16.

"With all the uncertainties in the market, including the oil price, we believe the market would remain sluggish for the foreseeable future," said Oriental Securities analyst Zhang Yang.

PetroChina Ltd., China's biggest oil company, was down 0.4 percent. Industrial & Commercial Bank of China Ltd., the country's biggest lender, was down 1 percnt. China Telecom Ltd. rose 0.24 percent.

China Sports Group, which builds and manages sports facilities, rose the daily limit of 10 percent on possible investor expectations of a post-Olympics jump in public interest in sports. Beijing Capital Tourism Co. and CYTS Tours Holding Co. also rose 10 percent.

In Hong Kong, the blue-chip Hang Seng Index added 0.3 percent to 22,102.01.

The benchmark has slid almost 21 percent in the first half of this year, a downward trend that worsened in recent weeks amid rising crude prices, worries over the U.S. economy and steep losses in mainland Chinese stocks.

"The market has moved toward pessimism in the last few weeks," said Howard Gorges, vice chairman of South China Brokerage. "I don't think anyone is sticking their neck out quite yet and saying there's a rally around the corner."

After oil's rise, upstream crude producer CNOOC climbed 2.9 percent. Refiner China Petroleum & Chemical Corp, or Sinopec, was down 0.7 percent after JP Morgan reduced its price target for the
company.

Developers lost ground amid reports that several Hong Kong banks were hiking lending rates. Cheung Kong slipped 2.1 percent.

Several telecom firms were up after recent losses. China Unicom and its takeover target, China Netcom, both rose.

In currency trading, the dollar fell to 105.28 yen by late afternoon, down from 106.14 Friday. The euro gained slightly against greenback to US$1.5797 compared with US$1.5794. (***)

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