Share prices tumble on currency concerns

Share prices tumble on currency concerns

HONG KONG (AFP): Share markets across Asia Pacific tumbled yesterday on the concerns over currency volatility, dealers said.

Regional currency traders faced a tough time when the ringgit, rupiah and peso hit all-time lows, taking with them the usually unflappable Singapore dollar to a 39-month low.

Shares in Kuala Lumpur, Jakarta and Manila all dropped Thursday in continued uncertainty.

"The regional currency meltdown, particularly the rapid fall in the ringgit, is continuing to weigh on the market," a dealer in Singapore said.

A senior dealer at a Kuala Lumpur bank-linked brokerage said that investors, especially foreign funds, were speculating the motives behind Prime Minister Mahathir Mohamad's endless calls for a ban on currency trading.

"The prime minister is a seasoned politician and he knows what he is doing. Market talk has it that he wants the ringgit to go down further in order for exports to become cheaper," he said. Japanese shares fell 2.2 percent, still affected by drop in business confidence and little hope of government measures to revive the economy.

In Tokyo, Japanese share prices closed 2.2 percent lower depressed by profit-taking among blue chips and continued futures-led selling, brokers said.

The key barometer of the Tokyo Stock Exchange fell 387.12 points to finish at 17,455.04 while the broader Topix index of all first section issues dipped 21.67 points to 1,366.78.

In Hong Kong, financial markets were closed for National Day holidays.

In Singapore, blue-chip stock prices ended 0.7 percent lower on lack of foreign support due to weak sentiment in regional currencies, dealers said.

The Stock Exchange of Singapore's blue-chip benchmark, Straits Times Industrials index, fell 14.14 points to end at 1,927.60 while the broader All-Singapore index fell 1.89 points to 469.54.

In Sydney, the Australian Stock Exchange's main indicator, the all ordinaries index, dipped 1.1 points to 2,778.1.

In Kuala Lumpur, Malaysia's key stock index closed 0.5 percent lower but off its low amid some buying interest by local investors amid lingering concerns about the ringgit.

The Kuala Lumpur Stock Exchange's 100-share weighted composite index fell 4.25 points to 791.58, after hitting an intra-day low of 785.75 points.

In Bangkok, Thai share prices closed up 0.6 percent in thin trade with investors sidelined ahead of a cabinet reshuffle expected next week and a financial sector reform package due out Oct. 15, analysts said.

The market shrugged off Moody's Investors Service downgrade of the country's long term foreign currency ratings for bonds and notes to "Baa1" from "A3", they said.

The composite Stock Exchange of Thailand (SET) index finished up 3.06 points at 550.86, while the selected SET 50 index added 0.37 points to end at 41.80.

In Jakarta, share prices slipped 0.01 percent amid lackluster trade hampered by concerns about the weak rupiah and tightening liquidity, dealers said.

In Manila, Philippine share prices dropped 1.7 percent on fears of more bank defaults and the fall of the peso, analysts said.

"It is a confluence of everything," an analyst for Pryce Securities Inc. said, citing the fall of the peso against the dollar, the resulting high interest rates, reports of more companies defaulting on bank loans and the economic malaise affecting the region.

The Philippine Stock Exchange composite index fell 36.15 points to close at 2,031.47 points.

In Shanghai, the Taiwan Stock Exchange weighted price index slid 190.36 points to 8,504. 66.

In Seoul, the composite index dropped 8.27 points to close at 636.65 on a volume of 27.6 million shares worth 363.8 billion won ($398 million).

In London, shares punched deeper into uncharted territory Thursday, encouraged by Wall Street's overnight rally and reports that the British government is planning fiscal changes which would cut companies' tax bills.

In morning trading, the FT-SE 100 index soared to a fresh all- time high of 5,367.3, before easing to 5,352.6, up 35.5 from the previous day's close.

In Paris, the CAC-40 index opened 3.22 points lower at 3,051.71.