Straits Times index drops 3.7 percent

Most equities markets in the Asia-Pacific region were lower on Monday. The main exception was the Shanghai Composite, which added 1.48 percent to 4,628.11 to reach a new record close in China. In South Korea, the Kospi index dropped 1.16 percent to 1,855.05, while Taiwan’s Taiex index fell 1.28 percent to 8,941.73 and the Sensex was 1.55 percent lower to 14,903.03 in India. Australia’s markets also saw declines, with the S&P/ASX200 down 1.67 percent to 5,920.2 and the Sydney Ordinaries 1.76 percent lower to 5,949.5. The Hong Kong Hang Seng index dropped 2.67 percent to 21,936.73, while the Straits Times index was 3.7 percent lower to 3,308.99 in Singapore for its biggest decline since the end of February. The STI has fallen 9.7 percent since July 24.

The Tokyo markets were lower as well. The Nikkei 225 was down 0.39 percent to 16,914.46 and dropped as lows as 16,675 early in the session, while the Topix index fell 0.27 percent to 1,668.04 and the Mothers market was 2.01 percent lower to 817.76. With the yen strengthening, exporters were mostly lower on the session. Carmakers were mixed, however, as Toyota Motor (TYO: 7203.T; NYSE: TM; LSE: TYT) added 1.4 percent to ¥7,180 after is said its profits rose by 32 percent in the most recent quarter. But Mazda Motor (TYO: 7261) was down 2.9 percent to ¥636. In the electronics sector, Sony (TYO: 6758; NYSE: SNE) dropped 3.1 percent to ¥5,920, its biggest loss since the middle of March, while camera maker Canon (TYO: 7751; NYSE: CAJ) was down 2.3 percent to ¥6,370. Banks were lower as investors worried that the Japanese economy is not expanding quickly enough to encourage investment in domestically-focused shares. Mizuho (TYO: 8411; NYSE: MFG) and Mitsubishi UFJ (TYO: 8306; NYSE: MTU) each dropped 2.5 percent, to ¥702,000 and ¥1.16 million respectively. Shares in Mizuho have declined by more than 16 percent since last week. Also in financial services sector, broker Nomura Holdings (TYO: 8604; NYSE: NMR; SGX: N33) was 3.2 percent lower to ¥2,135. Meanwhile, in the consumer finance sector Takefuji (TYO: 8564) added 2.1 percent to ¥3,810 after it said its profits were up substantially in the quarter.

Most European markets were lower as well, the major exception being Frankfurt’s Dax, which added 0.11 percent to 7,444.04 on the session. The FTSE Eurofirst 300 fell 0.85 percent to 1,504.27. The IBEX dropped 0.7 percent to 14,432.1 in Madrid, while the Paris CAC-40 was 1.16 percent lower to 5,532.99. Some banks were higher on the session. Societe Generale (Euronext: GLE) added 0.25 percent to €128.25 in Paris, while Commerzbank (FWB: CBK) gained 1.37 percent to €29.57 in Frankfurt. Elsewhere in financial services, lender Dexia (Euronext: DEXB, DX) added 2.85 percent to €20.54 after it said it would address the issue of its exposure to the subprime market in a conference. It was the first gain for the lender in 12 sessions, and the best performer on the day on the CAC-40. In the pharmaceuticals sector, Sanofi (Euronext: SAN; NYSE: SNY) added 0.23 percent to €59.93. Fresenius Medical Care (FWB: FREG) was up 1.95 percent to €35.99. The best performer on the day on the Dax was chemicals group BASF (FWB: BAS; LSE: BFA; NYSE: BF), which added 1.98 percent to €93.68. The worst performance on the Dax came from Infineon (FWB: IFX; NYSE: IFX), which fell 3.91 percent to €11.27 after it fired its CFO due to “irreconcilable differences”. Michelin fell the most on the CAC-40, dropping 3.73 percent to €88.28. Carmakers, meanwhile, were mixed. Volkswagen (FWB: VOW; OTC; VLKAY) added 1.44 percent to €140.90, but DaimlerChrysler (FWB: DCX; NYSE: DCX; TYO: 7663) was down 2.04 percent to €64.39 and Renault (Euronext: RNO) was 2.44 percent lower to €100.96. In the oil sector, Total fell 2.01 percent to €53.61 as oil prices dropped and worries arose that demand will slow if the US economy falters.

In London, the FTSE 100 was 0.57 percent lower to 6,189.1 and the FTSE 250 fell 1.67 percent to 10,998.8. Standard Life (LSE: SLET) was the biggest gainer on the 100, adding 3.03 percent to 315p on consolidation hopes within the sector. Builder Alfred McAlpine (LSE: MCA) did the best on the 250 with a gain of 4.7 percent to 484.5p. Other gainers on the session included the house building sector, where Persimmon (LSE: PSN) was up 1.93 percent to £11.64 and Taylor Wimpey (LSE: TW) added 2.18 percent to 339.75p. British American Tobacco (LSE: BATS; AMEX: BTI; KLSE: BAT) was 2.4 percent higher to £16.12, while music retailer HMV Group (LSE: HMV) gained 4.7 percent to 118.25p. The biggest loser on the day on the 100 was platinum miner Lonmin (LSE: LMI), which fell 4.81 percent to £30.85. Aquarius Platinum (LSE: LSE: AQP; ASX:AQP; JSE:AQP) did even worse on the 250, dropping 5.56 percent to £12.90. Elsewhere in the mining sector BHP Billiton (LSE: BLT; NYSE: BHP; ASX: BHP) dropped 2.98 percent to £13.33, while Kazakhmys (LSE: KAZ) fell 2.93 percent to £11.94, Anglo American (LSE: AAL) was 2.68 percent lower to £26.85 and Rio Tinto (LSE: RIO) was down 1.33 percent to £32.19. Investment trust Ashmore (LSE: ASHM) did the worst on the 250, falling 8 percent to 204p. Other decliners on the session included supermarket chain Wm Morrison (LSE: MRW), which dropped 3.6 percent to 274.25p. Pubs operator Punch Taverns (LSE: PUB) fell 3.36 percent to £10.36 and investment management group INVESCO (LSE: AVZ; NYSE: IVZ) was 3.15 percent lower to 585p on its exposure to the US housing sector.

Wall Street was higher in early afternoon trade. The Dow Jones Industrial Average had added 0.63 percent to 13,264.5, while the Nasdaq Composite was 0.29 percent higher to 2,518.56 and the S&P 400 was up 0.69 percent to 1,442.9. The Russell 2000 index had gained 0.06 percent to 755.84. Trade in shares of American Home Mortgage (NYSE: AHM) were halted after it had lost most of its market capitalization in the past few sessions, laid off nearly all its employees last Friday and today filed for bankruptcy protection in Delaware. Elsewhere in the sector, however, Countrywide Financial (NYSE: CFC) added 47 cents to $25.48. Investment banker Bear Stearns (NYSE: BSC) dropped $3.32 to $105.03 in the wake of last week’s reduced ratings outlook from Standard & Poor’s and after it fired an executive over the weekend. On the other hand, other members of the financial services sector were higher. Bank of America (NYSE: BAC) was 35 cents higher to $47.35, while JP Morgan Chase (NYSE: JPM) added 65 cents to $44.30, Citigroup (NYSE: C) gained 82 cents to $46.54, Wells Fargo (NYSE: WFC) was up $1.42 to $34.23 and Merrill Lynch (NYSE: MER) added $2.02 to $72.07. There were also gains in the pharmaceuticals sector, where Bristol-Myers Squibb (NYSE: BMY) was 7 cents higher to $28.07, Pfizer (NYSE: PFE) gained 39 cents to $23.90 and Merck (NYSE: MRK) was 80 cents higher to $51.09. Merck’s gains came on a broker upgrade. In the retail sector, Wal-Mart (NYSE: WMT) added $1.03 to $46.55 after it said that it is putting together a joint business-to-business venture in India.