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Asian Stocks Fall Amid Concerns Over US Economic Slowdown

Strategic Insights

— 2 min read

Asian stocks plummeted on Thursday, led by Sony and Samsung Electronics, after a drop in US home sales fueled concerns that the world's largest economy is slowing. The decline in US home sales, reported by the National Association of Realtors, sent shockwaves across the region, with all 10 industry groups in the Morgan Stanley Capital International Asia-Pacific index declining. The Nikkei 225 stock average fell 1.3% to 15,960.62, while the S&P/ASX 200 index in Australia lost 1.9%. Tom Murphy, a fund manager at Deutsche Bank in Sydney, attributed the decline to the US economic cycle, stating that Asian exporters, particularly those linked to consumers in the US, are at a relative disadvantage.

Key Takeaways:

  • Asian stocks fell the most in almost three weeks on Thursday, with the Morgan Stanley Capital International Asia-Pacific index losing 1.1% to 128.14 in Tokyo.
  • Sony and Samsung Electronics led the decline, with Sony losing 2.9% to ¥5,100 (US$43.80) and Samsung falling 1.4% to 637,000 won (US$666.73).
  • James Hardie Industries and Rinker Group, both based in Australia and deriving 80% of their earnings from the US building industry, also slid, with James Hardie falling 4.9% to ¥6.60 (US$5.03) and Rinker losing 2.4% to ¥13.60 (US$17.40).
  • BHP Billiton, the world's largest mining company, and PetroChina, the largest Chinese oil company, slid after posting earnings that failed to beat analyst estimates.
  • Toyota Motor declined 2.2% to ¥6,310, while LG.Philips LCD dropped 2.6% to 36,250 won.
  • The decline in Asian stocks was largely attributed to the US economic slowdown, with investors worried that the US economy has lost steam.

Statistics:

  • The US National Association of Realtors reported a 6.33 million annual rate of home resales in July, down from 6.55 million forecast by economists.
  • The Morgan Stanley Capital International Asia-Pacific index lost 1.1% to 128.14 in Tokyo.
  • The Nikkei 225 stock average fell 1.3% to 15,960.62, while the S&P/ASX 200 index in Australia lost 1.9%.
  • Sony lost 2.9% to ¥5,100 (US$43.80), while Samsung fell 1.4% to 637,000 won (US$666.73).
  • James Hardie Industries fell 4.9% to ¥6.60 (US$5.03), while Rinker Group lost 2.4% to ¥13.60 (US$17.40).
  • BHP Billiton declined 3.1% to ¥27.51 (US$31.29), while PetroChina fell 1.3% to HK$8.90 (US$1.14).

Sources:

  • Bloomberg
  • The National Association of Realtors
  • Morgan Stanley Capital International
  • Deutsche Bank
  • Kyobo Investment Management
  • Australian Broadcasting Corporation
  • Singapore Exchange
  • European stocks (FTSE 100, CAC, DAX)
  • Dow Jones EuroStoxx50

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