Asian Markets Briefing

By Guneet Singh Sahni
Emerging Markets Asia:

Asian indices fell last week on growth concerns and a shaky financial sector outlook.

If it's not excessive crude prices, then it's the slowdown fear and shaky financial sector cues from the U.S. that lead Asia... and this past week to another decline in Asian markets. Asian markets extended their losing streak, with most of the indices ending in the red on the back of declines in the stocks of oil refiners and on fear of an economic slowdown thanks to the Chinese GDP data. The markets crashed in the beginning of the week on reports by CLSA that the Bank of China may own about $20 billion of poisonous debt issued by Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), representing two-thirds of the total holdings among the six largest Chinese banks.

The Nikkei dropped 1.8% or 236 points; the Hang Seng declined 1.4% or 310 points; the Strait Times slid by 2.7% or 79 points; the CSI 300 index fell by 4.7% or 138 points and Taiwan was weighed down by 6.3%. The exception was India’s BSE Sensex, which made a gain of 1.2% or 165 points on the back of short covering and frenzied buying in already battered financial stocks.

Asian corporates have so far shown clear signs of weakness in their earnings reports, as they face the heat from higher borrowing costs, slowing exports and a shaky investment spending outlook.

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