Asia stocks mixed amid uncertainty in Japan, Libya
Wednesday, March 23, 2011; 1:32 AM
BANGKOK -- Asian stocks were mixed Wednesday following a retreat on Wall Street as the staggering toll exacted by Japan's worst-ever earthquake came into sharper focus and uncertainties grew about the outcome of Western military action against Libya.
Japan's Nikkei 225 was down 0.8 percent to 9,531.01 after a newspaper reported that government estimates of damages from the catastrophic March 11 earthquake and tsunami that devastated Japan's industrial northeast could exceed $300 billion.
The disaster also triggered a crisis at a nuclear power plant that led to the evacuation of tens of thousands of people and forced power cuts due to the shutdown of 11 of Japan's 54 nuclear power plants.
Two of the country's flagship brands - Toyota Motor Corp. and Honda Motor Co. - put off a return to normal production due to shortages of parts and raw materials because of earthquake damage to factories in affected areas. Toyota, the world's No. 1 automaker, said it will suspend output until Sunday - a production loss of 140,000 cars.
Unsurprisingly, the slowdowns hit their stock prices: Toyota drooped 1.5 percent and Honda was down 1.6 percent. Other Japanese vehicle makers were pummeled, including Mazda Motor Corp., down 2.6 percent, and Nissan Motor Corp., down 2.5 percent.
Elsewhere, South Korea's Kospi was up 0.2 percent to 2,016.35. Among big gainers was SsangYong Cement Industrial Co. Ltd., jumping 9 percent amid expectations that its exports would rise as Japan undertakes its mammoth task of rebuilding.
Benchmarks in Taiwan, Singapore and Thailand also rose, while Hong Kong's Hang Seng index dropped 0.3 percent to 22,798.01.
Investors, meanwhile, had a separate worry: a crisis in Libya and the real possibility that Moammar Gadhafi could keep his grip on power despite military action by Western powers intended to keep Gadhafi from overwhelming rebel forces trying to end his four-decade rule.
Oil prices hovered near $105 a barrel as violent uprisings in Libya and elsewhere in the Middle East kept traders nervous about possible crude supply disruptions. OPEC-member Libya, which produces enough oil to meet nearly 2 percent of world demand, has almost totally stopped shipping it.
The Yonghap news agency quoted South Korea's top central banker, Bank of Korea Gov. Kim Choong-soo, as saying Wednesday that oil prices are not likely to jump to the level seen in 2008, when oil prices peaked at $147 per barrel.
That added to the feeling among many that the crises in Japan and the Middle East won't derail the global economy.
"Despite these worries, many countries are still cautiously optimistic about the resilience of the global economy, and have not lowered their vigilance against rising inflation," DBS Bank Ltd. in Singapore said in a report, noting that Thailand and Korea have recently hiked interest rates.
"There is also more talk in China about allowing more yuan appreciation to address inflation," DBS said.
On Wall Street, stocks edged lower Tuesday, ending a three-day rally that had lifted the Dow Jones industrial average above 12,000 for the first time since an earthquake hit Japan more than a week ago.
The Dow Jones industrial average fell 17.90 points to close at 12,018.63. The Standard & Poor's 500 index fell 4.61, or 0.4 percent, to 1,293.77. The Nasdaq composite index fell 8.22, or 0.3 percent, to 2,683.87
Benchmark crude for May delivery was down 27 cents to $104.70 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.88 to settle at $104.97 on Tuesday.
In currencies, the euro dropped to $1.4179 from $1.4207 late Tuesday in New York. The dollar was little changed at 80.89 yen.