Asia-Pacific, Europe equities see declines

Asia-Pacific equities markets headed lower on Monday as investors worried that not only the US economy but also the Japanese economy are headed for recession. In India, the Sensex ended the session 1.14 percent lower at 18,152.78. Taiwan’s Taiex index fell 3.28 percent to 7,845.79 while the FTSE Straits Times Index was down 3.75 percent to 3,041.06. The Kospi index was 3.85 percent lower to 1,627.19. The biggest declines came in Hong Kong, where the Hang Seng fell 4.25 percent to 24,053.61, and on the Shanghai Composite, which dropped 7.19 percent to 4,419.29. Australian markets were closed for the Australia Day holiday.

Tokyo’s markets were down significantly on fears of recession as well as on a stronger yen. The Nikkei 225 was down 3.97 percent to 13,087.91 while the Topix index fell 3.85 percent to 1,293.03 and the Mothers market dropped 2.1 percent to 649.57. In the electronics sector, Sony (TYO: 6758; NYSE: SNE) was 4.5 percent lower to ¥4,880 while Nintendo (TYO: 7974; NAS: NTDOY; FWB: NTO) was down 9.5 percent, by its daily limit of ¥5,000, to ¥468,000. Nippon Steel (TYO: 5401) fell 7.7 percent to ¥639 on a report that its fiscal third quarter net income was down 13 percent over the same period the year before. Hitachi Construction Machinery (TYO: 6305) was down 14 percent to ¥2,610 for its biggest one-day decline in more than ten years after CLSA cut its recommendation to “underperform”.

European markets were mixed but mostly lower on the session. The exception was the Dax, which added 0.03 percent to 6,818.85 in Frankfurt. The Paris CAC-40 was down 0.61 percent to 4,848.3 and the IBEX fell 0.87 percent to 13,026.7 in Madrid while the pan-European FTSE Eurofirst 300 dropped 1 percent to 1,317.15. Banks were mixed. BNP Paribas (Euronext: BNP; TYO: 8665) added 0.27 percent to €65.68 while Credit Agricole (Euronext: ACA) was up 0.39 percent to €20.34 and Commerzbank (FWB: CBK) gained 0.67 percent to €19.61. Scandal-ridden Societe Generale (Euronext: GLE), however, dropped 3.82 percent to €71.05. The semiconductors sector saw declines, with STMicroelectronics (Euronext: STM; NYSE: STM) 1.66 percent lower to €8.30 and Infineon (FWB: IFX; NYSE: IFX) falling 2.38 percent to €6.16. In the steel sector, ThyssenKrupp (FWB: TKA; LSE: THK) dropped 1.85 percent to €32.36.

London’s markets were lower, with the FTSE 100 down 1.36 percent to 5,788.9 and the FTSE 250 falling 1.01 percent to 9,640.5. The London Stock Exchange Group (LSE: LSE) was 2.14 percent higher to £17.68 while in the chemicals sector, Johnson Matthey (LSE: JMAT) was up 1.82 percent to £17.94. Property developer Land Securities (LSE: LAND) added 1.6 percent to £15.85, but other developers and house builders saw significant declines on the session. Persimmon (LSE: PSN) was 4.18 percent lower to 790.5p while Taylor Wimpey (LSE: TW) was down 5.22 percent to 183.3p and Barratt Developments (LSE: BDEV) dropped 6.29 percent to 428.25p. Among miners, Anglo American (LSE: AAL) fell 4.83 percent to £24.65.

Wall Street ended higher as bad news from the housing market cheered investors, if only because they took it as a sign that the Federal Reserve will cut interest rates again this week, as many analysts expect. The Dow Jones Industrial Average added 1.45 percent to 12,383.89 while the Nasdaq Composite was up 1.02 percent to 2,349.91 and the S&P 500 gained 1.76 percent to 1,353.97. The Commerce Department said that new home sales were down 4.7 percent in December and that for the whole year sales were down by 26.4 percent in 2007 compared to the year before. Fast food restaurant McDonalds (NYSE: MCD) dropped $3.03 to $51.05 even though its quarterly profits were up by 3 percent after it said that sales were flat in December. In other food-related companies, Tyson Foods (NYSE: TSN) added 73 cents to $13.99 when it said it will rise prices after profits fell 40 percent last quarter. Oilfield services company Halliburton (NYSE: HAL) was up 46 cents to $33.55 on a quarterly profit that was up almost 5 percent on growth in Asia and the Middle East.