Asian shares down on dismal US news, TEPCO plunge
HONG KONG—Asian shares dropped on Monday as Tokyo was pulled lower by a plunging TEPCO and after dismal jobs figures in the US pointed to a faltering recovery in the world’s largest economy.
The embattled utility was the biggest loser on the Nikkei after reports that it was to record a massive loss following the meltdown at its Fukushima nuclear power plant.
Trading around the region was thin, with five markets on holiday, including Shanghai, Hong Kong and Seoul.
Tokyo shares finished the day 1.18 percent, or 111.86 points, lower at 9,380.35, an 11-week low.
Sydney was down 0.31 percent, or 14.0 points, at 4569.1. Singapore ended 1.02 percent, or 31.94 points, lower at 3,113.73.
US jobs data released Friday sent US stocks down as the Labor Department reported that the economy added a paltry 54,000 jobs in May.
In closing trade Friday the Dow Jones Industrial Average was off 97.29 points (0.79 percent) at 12,151.26.
“The outlook for the US economy is highly uncertain,” said Southern Cross Equities executive director Charlie Aitken in Sydney. “Therefore, I am listening to the bond market and maintaining an ultra-conservative equity strategy.”
The Japanese market was dragged by Tokyo Electric Power Co. (TEPCO), the operator of the crippled Fukushima Daiichi nuclear power plant, which has leaked radiation since its cooling systems were swamped by the tsunami of March 11.
Shares in the company – one of the world’s largest utilities – dived 27.62 percent following a media report that it would log a $7 billion loss in fiscal 2011.
The stock closed at 207 yen, down 79 yen from Friday, a slip better than its intra-day low of 206 yen.
The Kyodo News agency, citing an internal company document, reported the loss excludes compensation for the tens of thousands of people affected by the ongoing crisis.
The worst nuclear disaster since Chernobyl in 1986 has forced the evacuation of tens of thousands of people from their houses, businesses and farms in a 20-kilometer (12-mile) radius around the plant.
There has been no official estimate of damages yet, but the sum is widely expected to reach several trillion yen (tens of billions of dollars).
“Concerns are rising that the company may not be able to survive as a going concern in the coming year,” a fund manager at a Japanese asset management firm told Dow Jones Newswires.
“The compensation scheme hasn’t been established yet as uncertainty remains over Japanese politics,” the manager added.
On the forex markets the euro strengthened slightly against the dollar amid growing relief over Europe’s continued bailout for heavily indebted Greece, dealers said.
The euro stood at $1.4637 in the afternoon, almost unchanged from $1.4638 in New York late Friday. The European single currency rose to 117.58 yen from 117.40 yen.
The dollar firmed to 80.31 yen from 80.25 yen.
The euro held firm after the EU, International Monetary Fund and European Central Bank said Friday they have agreed to extend the next tranche of funds under Greece’s debt rescue accord package, most likely in July.
Oil was down ahead of a key OPEC meeting this week in Vienna.
New York’s main contract, light sweet crude for July delivery, dipped 14 cents to $100.08 a barrel and Brent North Sea crude for July delivery lost 41 cents at $115.43 in the afternoon.
“Looking ahead, the OPEC meeting is coming up this Wednesday… and it is going to be an important event for oil,” said Victor Shum, an analyst with energy consultancy Purvin and Gertz.
In other markets:
— Manila closed 0.90 percent, or 38.72 points, lower at 4,258.90.
Top-traded Philippine Long Distance Telephone shed 0.76 percent to 2,340 pesos.
Lepanto Consolidated Mining dropped 4.40 percent to 87 centavos, while San Miguel Corp. lost 0.34 percent to 116.50 pesos.
— Jakarta fell 9.82 points, or 0.26 percent, to 3,834.20.
Bank Rakyat fell 2.3 percent to 6,350 rupiah, gas distributor Gas Negara slid 2.5 percent to 3,975 rupiah while coal producer Bumi Resources rose 3.0 percent to 3,450 rupiah.
— Kuala Lumpur ended down 0.49 percent, or 7.71 points, to close at 1,552.14.
Gaming firm Genting lost 2 percent to 10.98 ringgit, automaker Proton shed 2.9 percent to 3.35 and property developer SP Setia eased 2.4 percent to 4.09.
Banking firms Maybank added 0.2 percent to 8.74 while Bank Islam Malaysia gained 4.4 percent to 1.90 ringgit.
— Bangkok slid 1.11 percent, or 11.70 points, to 1,046.16.
Banpu lost 4 baht to 726, while Siam Cement fell 7 baht to 345.
— Mumbai rose 0.24 percent, or 43.63 points, to 18,420.11 on bargain hunting and easing of crude oil prices.
India’s largest private aluminium producer Hindalco fell 1.69 percent to 186.2 rupees while auto and farm equipment maker Mahindra and Mahindra slipped 1.43 percent to 657.65.
Sun TV Network rose 7.2 percent to 303.85 rupees on bargain hunting after a sharp fall last week.
Hong Kong, Shanghai, Taipei, Seoul and Wellington were closed.
