Asian Stock Markets Slide into Red

By STEPHEN WRIGHT / AP WRITER

BANGKOK — Most Asian markets slid into the red Wednesday as weak earnings from financial firms, lower commodity prices and concerns about ailing U.S. automakers reinforced pervasive gloom about the global economy.

Japan's benchmark Nikkei 225 average fell 55 points, or 0.7 percent, to 8,273.22 as investors digested a 64 percent slump in first-half earnings at the country's biggest bank, Mitsubishi UFJ Financial Group Inc.

In Australia, a major resources producer, the main index fell 0.7 percent as crude oil traded near a 22-month low and metals prices fell overnight. Hong Kong's Hang Seng index declined 0.8 percent to 12,815.80.

China bucked the trend with the Shanghai Composite Index surging 6.1 percent to 2,017.47 as market heavyweight Petrochina rallied on expectations the government will allow fuel prices to be hiked next month.

A late-session rally Tuesday on Wall Street—which pushed the Dow Jones Industrial average up 151.17 points, or 1.8 percent, to 8,424.75—failed to spur much enthusiasm in beaten-down Asian markets.

"It's looking pretty miserable at the moment," said Song Seng Wun, head of research at CIMB Securities in Singapore.

"The question is how low the markets can go and whether previous bear market benchmarks such as the Asian financial crisis or the tech bubble are a reliable guide," Song said. "At this juncture, the safest bet is to be as defensive as possible, to find some where to take shelter and to wait and see."

US stock index futures were down, suggesting Wall Street would open lower Wednesday. Dow futures were down 120 points, or 1.4 percent, to 8,376 and S&P 500 futures were down 12.6 points, or 1.5 percent, to 853.9.

Japan's Mitsubishi UFJ dived 6.4 percent as the market reacted to grim earnings that were released after the close of trading Tuesday. The lender's first-half performance was battered by an increase in bad loans as economic activity slowed and by big losses on its share portfolio.

Uncertainty over the fate of a rescue plan for ailing U.S. automakers also dampened market sentiment, said Kazuki Miyazawa, a market analyst at Daiwa Securities SMBC in Toyko.

"It has turned into a political issue and looks unpredictable," he said.

Detroit's Big Three automakers begged Congress Tuesday for a $25 billion lifeline to stay afloat. But the rescue plan appeared stalled, opposed by Republicans and the Bush administration unwilling.

Lower commodity prices hit several stocks in the region.

In Sydney, Woodside Petroleum fell 3 percent as crude oil hovered at 22-month lows below $55 a barrel in Asian trading. BHP Billiton, the world's biggest miner, was off 4.1 percent, and zinc producer Oz Minerals, which warned 2008 profit would fall because of "substantially lower" commodity prices and higher production costs, plummeted nearly 14 percent.

Gold for December delivery fell $9.30 to $732.70 an ounce on the New York Mercantile Exchange overnight and 3-month copper futures on the London Metals Exchange were down $80 to $3,590 per ton.

In Singapore, commodities company Noble Group dived 13.8 percent on the likelihood earnings will be hurt by sliding commodity prices as demand wanes in the face of a sharp downturn in global growth. Neptune Orient Lines, Southeast Asia's largest container line, fell 3.4 percent after revealing it will shed 1,000 workers because of an accelerating slowdown in global trade.

Earlier this week, the National Association for Business Economics in the United States forecast recessions in many of the world's major economies. It said the U.S. economy, which shrank at an annual rate of 0.3 percent in the July-September period, would contract at a rate of 2.6 percent in the current quarter.

The association also forecast that Canada, Mexico, Britain and much of Europe would all suffer recessions in the coming months. Japan and the 15-nation euro zone have already entered recessions, defined as two consecutive quarters of contracting gross domestic product.