2 Feb 2009

Asia stocks slide as company outlooks darken

10:04 pm on 2 February 2009

Stocks in Asia fell on Monday, with forecasts of corporate earnings slashed as the global economy rapidly deteriorates.

From the auto industry to technology firms, companies are lowering their outlooks because of the worsening environment for business and consumer spending.

Waning demand from developed economies in the West continued to devastate Asia's export markets and reverberate through financial markets.

Hitachi Ltd plunged 17% after it warned of a record annual loss due to weak sales, a firmer yen and costs to restructure its sprawling operations. The $US7.8 billion loss would be the biggest ever full-year loss for a Japanese manufacturer.

Japan's Nikkei share average fell 1.5%, down for a second day. The broader Topix index of all first-section shares dropped 16.18 points, or 2.04%, to 777.85.

In addition to Hitachi, shares of NEC Corp and Mitsubishi Electric Corp both fell after the companies slashed their outlooks.

Hong Kong's Hang Seng index fell 2.75% in thin volume.

In Australia, where the benchmark stocks index was down 1.2%, shares of miner Rio Tinto rose 5.5% after state-owned Chinese aluminium company Chinalco held talks with Rio to take a stake in the firm.

The benchmark S&P/ASX200 index was down 43.3 points at 3,497.4 while the broader All Ordinaries index fell 34.6 points, or 0.99% to 3,443.5.

In New Zealand, the benchmark index was down 3 points, or 0.10%, to 2771 on turnover of $65 million.

Top stocks were mixed, wtih Telecom up 3 cents to $2.69, while Fletcher Building fell 7c to $5.58 and Contact was down 1c to $6.86.