This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Asia Slides Lower on Sentiment and Storms

Asian markets shrugged off Wall Street's gains and bled into the red Wednesday, as earnings downgrades and disappointments weighed on investor sentiment.

The Hang Seng dropped 638 points, or 2.6%, to 23,653, while China's Shanghai Composite Index fell 40 points, or 0.9%, to 4417. In Japan, the Nikkei lost 133 points, or 1%, to 13,345.

Other Asian markets fell in line with Hong Kong and Japan. Taiwan's Taiex eased 33 points, or 0.4%, to 7543, and South Korea's Kospi tumbled 49 points, or 3%, to 1589. In India, the Bombay Sensitive Index finished 333 points, or 1.8% lower, at 17,758, perturbed by Tuesday's pat stance on interest rates by the central bank.

Insurance firms in Hong Kong and China took a beating following an announcement by China Life Insurance (LFC) that it projects net profit to grow by 50%, to 14.38 billion yuan ($2 billion) vs. analysts' expectations of 80% growth.

China Watch: A NICE Growth Play

"People's high expectations are weighing a lot on the markets. Even in the case of companies like China Life Insurance, where earnings are very good, people were expecting a lot more," says Richard Lee, an analyst for Core Pacific Yamaichi in Hong Kong.

Shares in China Life Insurance plunged 7.4%, to HK$29. China's second largest insurer Ping An (PIAIF), which met expectations Tuesday, doubling earnings to 7.34 billion yuan ($1 billion), also fell. The stock dropped 6.5%, to HK$57.40, as analysts said that investors were concerned about whether excess cash would weigh on future growth.

Telecoms also fell, although China Unicom (CHU) bucked the trend as it said that earnings would be more than double the 3.7 billion yuan ($515 million) achieved in 2006. China Unicom gained 1.7%, to HK$18.

Market leader China Mobile (CHL) tumbled 3.7%, to HK$113.60, while China Netcom (CN) lost 2%, to HK$24.10, and China Telecom (CHA) eased 1.8%, to HK$5.58.

Among tech shares, (ALBCF) slipped 6.8%, to HK$18.92, as dealers said that hedge funds were unloading big positions throughout the day. ADRs in (BIDU) were following in Frankfurt morning trading, off 4.4%, to 178.47 euros. Lee says that "fundamentally" is a good company, and that shares have been selling off due to overvaluation in 2007. "In Asia you see much quicker panic selling than elsewhere," adds Lee.

On the mainland, the insurers dragged on the financial sector. Bank of China (BACHF) declined 1.4%, to 5.53 yuan, while Industrial & Commercial Bank of China (IDCBF) slid 2.9%, to 6.46 yuan.

Transportation stocks continued to be the biggest victims of the snowstorms in China. Air China (AIRYY) dipped 3.5%, to 20.71 yuan, while China Eastern Airlines (CEA) lost 2.7%, to 14.82 yuan. Since the snowstorms began a week ago, Air China has lost 20% of its market value, and China Eastern has slipped back 16.5%.

The price of the yuan rose to its highest level since the dollar peg was abolished in 2005, to 7.19 yuan vs. the dollar, as currency traders speculated the snowstorms would push inflation higher.

In Japan, a weakening yen could not help offset losses spurred by more subprime jitters. The yen fell to 107 vs. 106.6 previously in Asian trading.

Mizuho Financial (MFG) announced that it will writedown as much as 300 billion yen, or $2.8 billion, on subprime losses, and that it would inject cash into its ailing securities subsidiary. Mizuho lost 1.6%, to 49,500 yen. Mitsubishi UFJ (MTU) held up however, off 0.1%, at 1029 yen.

Honda (HMC) bucked the negative trend and rose 1.2%, to 3300 yen, after the company announced fourth-quarter profit rose 38%, to 200 billion yen, or $1.9 billion. In a phenomenon that gave some investors hope of exaggeration in reports of a global consumption slowdown, Japan's second-largest carmaker cited an increase in sales in the U.S. and Europe.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs