naked capitalism

The bloodbath continues, largely in reaction to the bad economic news reports in the US . From Bloomberg:

Asian stocks tumbled, driving Japan’s Nikkei 225 Stock Average down as much as 10 percent, as concern deepened that the global economy is headed for a recession after U.S. retail sales fell….

“Investors are still pricing in a global recession” said Hiroshi Morikawa, who helps manage $14 billion as senior strategist at Tokyo-based MU Investments Co. “We prefer to wait, maybe until next year, before making any new investments. We’re holding cash.”

The MSCI Asia Pacific Index lost 5.9 percent to 89.51 at 10:49 a.m. in Tokyo, extending yesterday’s 1.6 percent decline. The measure is still up 4.1 percent this week after rallies at the start triggered by a $2 trillion global bank rescue.

Japan’s Nikkei 225 Stock Average dropped 10 percent to 8,591.59. The decline caused trading in Nikkei futures to be temporarily halted. South Korea’s Kospi Index retreated 6.3 percent. All benchmark indexes in the region sank.

Standard & Poor’s 500 Index futures fell 1.2 percent. Treasuries were little changed and the Japanese yen climbed toward a seven-month high against the dollar.

Japan’s Prime Minister Taro Aso said today a $250 billion U.S. bank bailout plan is “insufficient” and “that’s why markets are falling.” Aso was speaking to lawmakers in parliament.

From the Wall Street Journal:

Asian markets dropped sharply early Thursday as fears about a U.S. recession hit exporters such as Honda Motor in Tokyo, while Rio Tinto tumbled more than 14% in Sydney on concerns global demand for commodities is weakening.

Japan’s Nikkei 225 Average lost 9.7% to 8617.44, while the broader Topix index shed 8.3% to 876.54.

Australia’s S&P/ASX 200 index lost 5.5% to 4065.80 and New Zealand’s NZX 50 index gave up 4.3% to 2780.90. South Korea’s Kospi slumped 6.2% to 1256.98.

“It’s clear that Asia won’t be able to escape the financial crisis unscathed, with the U.S. banking crisis now spreading around the world,” wrote Merrill Lynch analysts in a report. “However, unlike their counterparts in Europe and the U.S., the financial problems are less deep-rooted and widespread in Asia.”

Shares of Rio Tinto tumbled 14.3% in Sydney a day after the resources giant said the global financial crisis will force it to delay a planned sale of $10 billion of assets. The company added that China wasn’t immune to the global downturn and that the company may freeze capital expenditure as it reassesses commodity demand amid a looming global slowdown.

Shares of regional exporters tumbled on worries about slowing global demand, with Honda Motor shedding 10.4% and Sony losing 10.9% in Tokyo, while Hyundai Motor lost 5.9% in Seoul.

Shares of Mazda Motor fell 4.9%, on top of their 9.2% decline Wednesday, after the Nikkei business daily reported that U.S. automaker Ford Motor has asked Denso to purchase a part of its 33.4% stake in Mazda. The report added that Denso, which wants to expand business with Mazda, is likely to consider purchasing some of the shares.

Steelmakers and shipping stocks also dropped sharply on worries about global demand, with JFE Holdings shrinking 13.1% in Tokyo and Mitsui O.S.K. Lines losing 11.3% in Tokyo. In Seoul, Posco gave up 9%, while STX Pan Ocean fell 9.1%.

In the financial sector, Mizuho Financial Group lost 11.5% and Sumitomo Mitsui Financial Group slumped 14% in Tokyo, while Macquarie Group lost 7.8% in Sydney. In Seoul, shares of Industrial Bank of Korea shed 11.7%.

Shares of Citigroup lost 11.6% after the Nikkei business daily reported the banking giant is considering delaying the merger of its retail brokerage firm Nikko Cordial Securities with its corporate securities business Nikko Citigroup.

Energy-related stocks tumbled after November crude-oil futures fell $4.09 to $74.54 a barrel on the New York Mercantile Exchange overnight, ending at their weakest level in more than a year. The front-month contract recently dropped as much as $1.25 to $73.29 a barrel in electronic trading.

Shares of BHP Billiton gave up 9.8% and Woodside Petroleum lost 3.5% in Sydney, while commodity trader Mitsubishi declined 10.8% in Tokyo.

In Asian currency trading, the U.S. dollar bought 99.79 yen, compared with 101.34 yen late Wednesday.