Domino Effect Sends Asian Markets Down

Lauren Cooper
Asian markets plummet
Asian markets plummet

Shares in Asia plummeted Friday, following the turmoil in the U.S. markets. In Japan the Nikkei tumbled 3.1% to 10,365 and in China the Shanghai Composite Index sank 1.9% to 2,688. Hong Kong's Hang Seng fell 1.1% to end the day at 19,920.

In Tokyo, shares were sharply down, with shares in everything from cement to cameras sinking. Exporters suffered a double whammy, reeling from both the fall in the euro as a result of the Greek debt debacle and the domino effect of the plunge in the U.S. markets. Among consumer electronics makers Sharp tumbled 6.4%, Konica Minolta sank 5.1%, Canon slid 3.9% and Sony declined 3.2%.

Fanuc, which makes robotic parts for factories that speed up sorting and packaging of products, nosedived 6.8%, Oki Electric, a maker of computer equipment and ATM machines, lost 5.3% and Mitsumi Electric, which makes a range of electronic parts from CD-ROM drives to remote controls, slid 5.1%.

Financial services companies were hard hit with Sumitomo Mitsui losing 3.5%, Nomura dropping 2.6% and Mitsubishi UFJ dipping 2.5%.

Property developers plunged with Tokyu Land diving 5.2%, Heiwa Real Estate losing 4.6% and Mitsubishi Estate falling 3.1%. Other companies with big losses included Nippon Sheet Glass, which plunged 6.8%, Fast Retailing, which tumbled 6% and Nippon Soda, which lost 5%. Nintendo, maker of the Wii game console that is hoping to make a comeback, shed a whopping 7.7%.

In China, worries that a slowdown in world economies could affect demand for air travel sent shares in airlines lower. China Southern Airlines plunged 5.6%, China Eastern Airlines fell 5% and Air China dropped 4.7%. Commodities also lost value with Jiangxi Copper dropping 3.7%, Aluminum Corp. of China, or Chalco, falling 3.1% and Shandong Nanshan Aluminum sinking 3.2%.

Several Chinese stocks made gains today, bucking the domino effect. In China, Shandong Dong-E E-Jiao, a traditional medicine company whose signature product is a blood remedy made from donkey skin, surged 5.1%. Shandong Gold rose 4.5%. Heilongjiang Agriculture, a rice and soybean company, rocketed up 7.2%.

In Hong Kong, the Hang Seng held its own, with banks and financial companies bearing the brunt of the global sell-off. HSBC shed 4.3%, Bank of Communications fell 1.9% and Bank of China lost 0.8%. Other big losers included Esprit, whose European shoppers are not much in the mood for buying party clothes in the midst of the debt crisis. Its stock dropped 5.1%, and Li & Fung, which exports large amounts of clothes and fashion accessories to the U.S. and Europe, receded 3%.

Hong Kong companies trading in jewelry were out of favor today with fine jewelry company Eternite International plunging 5.7% and King Fook Holdings dipping 2.2%. But gold miners were among Hong Kong's best performers with Zijin Mining racking up a 4.2% gain and Real Gold Mining advancing 3.2%. Perhaps investors, rattled by the stock market's turbulent swings, are searching for another place to put their money.