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Asian stocks take a battering

Asian stocks take a battering

London: Shipping shares were in the firing line in Asian trading on Tuesday, as the Baltic Dry Index fell further, to its lowest level for almost 15 months. Dropping another 3% to 5,492, the Index has now plunged more than 50% since mid-May, reflecting softer demand for major dry bulk commodities such as iron ore and coal as well as concern over the huge volume of dry bulk tonnage due to be commissioned over the next three years.

Japanese majors Kawasaki Kisen Kaisha and Mitsui OSK both lost more than 5% whilst Taiwan's Evergreen fell by 3.7% and South Korea's Hanjin by more than 4%. Asian banking stocks were also hard hit - with Sumitomo Mitsui Financial, Mizuho Financial and Mitsubishi UFJ amongst those affected by negative sentiment.

The Nikkei 225 lost 1.7% on the day, the Hang Seng index fell by just over 2% and the index for mainland stocks traded on the territory plunged 3.4%. The general battering of stocks in Asia saw markets in London and New York bracing themselves for similar negative sentiment.

The oil sector, in particular, has been hard hit as the extent of the global slowdown becomes more apparent. Both Sinopec and PetroChina fell sharply. Meanwhile crude oil prices hit a five-month low in the run-up to the crunch OPEC meeting today in Vienna. October West Texas Intermediate fell to an intra-day low of $104.70 before rising again to close at $106.34 while October Brent closed at $103.44. Hawkish members of the oil exporting countries' cartel would like to see oil production reined in to boost flagging prices - more moderate members, however, are concerned about inflicting further damage on the weaker global economy.  [09/09/08]