Asia at a Glance

HK shares close at 3-year low; China banks slump
Hong Kong shares fell 4.4 percent to a three-year closing low on Friday as investors exited equity holdings ahead of the weekend, following a week of sharp gains and steep slides amid looming fears
of a global recession.

The benchmark Hang Seng Index closed 676.31 points lower at 14,554.21, after advancing to 15,300.07 earlier.

The blue-chip index ended the week 1.6 percent lower after a 2-day, 14 percent rally was outweighed by a 13.5 percent drop in the last three days of trade.

“The focus of the financial crises has now firmly moved to Asia,” said Linus Yip, strategist with First Shanghai Securities. “Given the way the Korean markets and currency have gone in the past few days people have a lot to be worried about.”

South Korea’s KOSPI closed at a three-year low on Friday, while its currency has fallen 17 percent in the last five weeks.

Mainland mobile phone operator China Unicom shed 6.7 percent on concerns its merger with fixed-line network China Netcom may hurt earnings. The two companies merged on Oct. 15 and on the same day, China Netcom reported a fall in revenue during the first nine months.

Asia’s largest oil & gas producer, PetroChina, slid 6.0 percent on fears that lower oil prices may dent profits. Crude oil prices fell more than $6 a barrel to below $70 overnight on rising U.S. inventories and slowing demand amid a global economic crisis.Offshore oil producer CNOOC plumetted 6.2 percent, adding to its two-day 14.6 percent slide.

Mainboard turnover fell to HK$59.3 billion ($7.6 billion) from HK$64.3 billion at on Thursday. Turnover spiked nearly 11 percent during the 10-minute closing auction window as investors bailed out of the markets ahead of the weekend.

“People are cautious ahead of the weekend in view of the extreme volatility on Wall Street, so the selling pressure remains,” said Howard Gorges, vice chairman at South China Securities. “Earnings estimates are being revised down and these are being priced in by the market. People are reckoning that earnings will be adversely affected by the crisis.”

Chinese bank shares fell on worries China’s slowing economy may cut demand for loans, trim profits and raise bad loans, said Y.K. Lee, an analyst at Core-Pacific Yamaichi. Investors also fretted that U.S. and European banks invested in mainland banks may sell their holdings in the wake of the turmoil in the financial markets.

China Construction Bank dropped 6.7 percent, while No.3 lender Bank of China slid 7.8 percent. The China Enterprises Index of top locally listed mainland Chinese companies tumbled 4.8 percent to 7,007.53.

Shares in gold miner Zijin Mining dropped 7.5 percent after the price of the precious metal eased further on Friday, following a 6 percent decline overnight as investors fled commodities, including bullion, and opted for the safety of cash.

Indian shares plummeted further on Friday, after gains in early trade, as a gloomy outlook about the global economy strengthened the bearish mood and triggered a sell-off across the counters.

“Global events have been largely responsible for the recent volatility in markets. India has been impacted primarily due to flight of capital and risk aversion with regard to emerging markets,” said Puneet Nanda, chief investment officer of ICICI Prudential Life.

Market regulator’s data showed foreign funds have dumped Indian equity worth more than $11.5 billion in 2008 so far.

The Bombay Stock Exchange’s benchmark Sensitive Index closed Friday at 9,975.35, its first sub-10,000 points finish since June 20, 2006, when it ended at 9,822.52. Today, it had risen almost 2 percent to the day’s high of 10,786.93 points before the downward slide. The barometer lost 5.25 percent this week and is down nearly 53 percent from its lifetime high of 21,206.77 touched on Jan. 10, 2008.

The National Stock Exchange also swung in a range of 300 points Friday to end 194.95 points or 5.96 percent lower at 3,074.35.

Dealers said fears of a global slowdown overshadowed the spate of measures recently announced by regulators to ease the liquidity crunch. In one such measure, the Indian central bank infused a trillion rupees (about $20.6 billion) into the money market on Oct. 11 by slashing the reserve requirements that lenders should park with it by 250 basis points to 6.5 percent.

ICICI Prudential Life’s Nanda added: “However, with GDP growth rate in the 7.5 percent to 8.0 percent range, high savings and investment rate along with reserves in excess of $275 billion, India’s macro fundamentals remain very strong. This coupled with extremely reasonable valuations, makes Indian equity markets an attractive destination for disciplined long term investors.”