Monday 27 April 2009

Asian markets retreat on swine flu fears

Asian markets retreat on swine flu fears
Asian stock markets retreated on Monday as investors worried the outbreak of swine flu in North America could grow into a worldwide pandemic that deepens the global recession.

Last Updated: 10:26AM BST 27 Apr 2009

Fears over a virus that has already made hundreds ill, and possibly killed more than 100 in Mexico, led investors to buy drug makers and dump airlines such as Qantas Airways (-4pc) and Cathay Pacific (-9pc).

In Asia, investors are painfully aware of the toll an epidemic can exact on companies and industries after SARS battered regional economies from Hong Kong to Singapore in 2003.

The markets were still more cautious than panicked, analysts said, yet mindful that the disease could derail what many believe are the beginnings of a recovery in a global economy reeling from its worst downturn in years. With the markets up sharply since March, the disease could cause more selling should it continue to spread.

"Investors are already sitting nervously looking for excuse to sell off and what better than swine flu," said Miles Remington, head of Asian sales trading at BNP Paribas Securities in Hong Kong.

In Hong Kong, the Hang Seng fell 413.63, or 2.7pc, to 14,845.22. Korea's Kospi lost 13.36 points, or 1pc, to 1,340.07, while Japan, the Nikkei 225 stock average dropped in early trading before edging up 18.3 points - or 0.2pc - to 8726.

Elsewhere, Australia's index shed 0.5pc, Shanghai's benchmark dropped 1.2pc and Taiwan's stock measure plummeted 3.2pc.

The outbreak offset optimism on Wall Street on Friday over the US Federal Reserve's announcement that 19 major banks won't be allowed to fail — even if they fared poorly on the government's 'stress tests' of banking health.

The Dow rose 119.23, or 1.5pc, to 8,076.29, after rising by as many as 170 points.

Oil prices slipped in Asian trade as investors mulled comments from OPEC suggesting the price was too low for companies to justify new investments in crude production. Benchmark crude for June delivery fell $1.28 to $50.25. The contract jumped $1.93 to settle at $51.55 last week.

Related Articles
Drugs companies prepare for epidemic
GlaxoSmithKline leads pharmaceutical shares higher on swine flu outbreak
Mexico swine flu deaths raise fears of global epidemic
Asian shares mostly higher but caution lingers
British passengers screened for swine flu amid fears that disease has spread worldwide

No comments: