(1888PressRelease)
May 19, 2009 - Asian stock markets fell Monday as weak company earnings led investors to ratchet down hopes for an economic recovery but India's index vaulted nearly 11 percent after election results paved the way for economic reforms.
Tokyo shares were hardest hit after two of Japan's leading companies, Panasonic and Mizuho Financial, reported colossal losses for the last fiscal year. The strengthening yen hurt the country's major exporters. Oil firms, meanwhile, sank along with crude prices.
But India provided a bright spot, its shares surging in early trade as results of national elections boosted confidence about the government's stability and ability to enact long-awaited reforms.
Losses across most of Asia followed Wall Street and came after global markets ended last week mostly higher. One catalyst was the still-dreary outlook for the world's largest economy highlighted by ugly U.S. retail and housing figures. Plummeting Chinese exports and foreign investment didn't help matters. Investors have jumped into stocks since early March as the rate of deterioration in the world economy eased somewhat.
Analysts say a correction is healthy after such a steep climb. At the same time, expectations are rising for evidence of growth in economies and corporate earnings, not just slower declines.
"We need to see more signs of demand actually picking up and the economy improving. Without that, we're going to trade in a range or see more selling," said Stephen Yang, an analyst with Seedorf Luxman & Partners in Singapore.
Japan's Nikkei 225 stock index lost 213.25 points, or 2.3 percent, to 9,051.77. Hong Kong's Hang Seng slid 212.09, or 1.3 percent, to 16,578.61, while South Korea's shed 0.6 percent to 1,383.53.
Elsewhere, Shanghai's index dropped 0.6 percent and Australia's stock measure was off 0.9 percent.
In India, the benchmark Sensex vaulted 10.7 percent after opening Monday, forcing a halt to trading, amid euphoria over the Congress Party's definitive victory in national elections.
Friday in New York, stocks extended the week's losses as investors found little incentive to buy despite economic news that wasn't as weak as expected. The Dow Jones industrial average fell 62.68, or 0.8 percent, to 8,268.64. The broader Standard & Poor's 500 index fell 10.19, or 1.1 percent, to 882.88. U.S. futures pointed to more losses on Wall Street Monday. Dow futures fell 44 points, or 0.5 percent, to 8,223 and S&P futures dropped 3.9, or 0.4 percent, to 879.10.
Oil prices hovered above $56 a barrel in Asia as traders backed off last week's push to above $60 amid signs of weak crude demand. Benchmark crude for June delivery was up 33 cents to $56.67. The contract dropped $2.28 on Friday.
In currencies, the dollar weakened against the yen, a reflection of the lower appetite for risk among investors who've treated the Japanese currency as a safe haven in recent months. The greenback fell to 94.98 yen from 95.26 yen.
The euro slid to $1.3458 from $1.3493.
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