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Russian and Other Stock Markets Plunge
The Russian stock market took a sharp downturn on Monday. At 3:40 p.m., the MICEX index was down 6.29 percent, to 1675.85 points, and the RTS had fallen 6.72 percent, to 2013.95 points, in heavy trading. Hardest hit was Surgutneftegaz stock, down 10.5 percent on the RTS and 9 percent on MICEX. On MICEX, Norilsk Nickel was down 7.7 percent, RAO UES of Russia 8.4 percent, LUKOIL 7 percent and Sberbank 7.5 percent. On RTS, RAO lost 8.8 percent, Norilsk Nickel 8.3 percent and LUKOIL 7.8 percent.
The Russian markets were caught in a worldwide wave that started in Japan, where the Nikkei index hit a two-year low as investors reacted to setbacks on the American market and new signs of recession in the world's largest economy last week. The United States is Asia's largest export market. India also felt the blow heavily, as the Bombay Stock Exchange in Mumbai fell 7.14 percent, 1356.3 points, at the end of the day (having been down 11 percent at one point) and the National Stock Exchange lost 10.6 percent.
In the People's Republic of China, the Shanghai Composite lost 5.14 percent (266.08 points) and the Hong Kong Hang Seng was down 5.49 percent (1383 points). The Chinese markets were further aggravated by corporate news. Air China Ltd. lost its 10-percent daily limit after its attempt to acquire a share in China Eastern Airlines Corp. was unsuccessful. Ping An Insurance Co. also dropped 10 percent after announcing its intention to issue more stock. PetroChina was down 4.8 percent and Baoshan Iron & Steel lost 7.8 percent.
Chinese banks also had a hard day, with Bank of China stock dropping 4.7 percent of its value after analysts predicted a $2.4-billion loss in the third quarter of last year because of the American mortgage crisis. Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp. followed along, with losses of 4 percent and 3.3 percent, respectively.
The Seoul KOPSI index fell 2.95 percent to a five-month low. Samsung Heavy Industries led the slide, losing 10.4 percent; shipbuilder Hyundai Heavy Industries was down 5.77 percent and television maker LG.Philips LCD Co. dropped 4.67. The KOPSI has lost 11 percent since the beginning of the year and ended the day at 1683.56 points. The Jakarta Composite fell 4.8 percent, to 2485.88 points, and the Thai SET Composite dropped 2.7 percent to 768.17 percent.
Matters were no better in Europe, where corporate news added to concerns over a U.S. recession and slower growth in Europe. Mjaor Dutch financial company ING Groep NV lost 2.7 percent. Barclays Plc., Britain's third largest bank, lost an equal portion. Britain's No. 6 bank Lloyds TSB was down 1.9 percent, and Danish insurer Aegon NV lost 2 percent. The Swiss reinsurance Co. lost 6.7 percent after UBS bank lowered its estimate of the company stock's worth due to its losses connected with instability on the credit market. The British Wolseley Plc., the world's largest supplier of building materials, ended the day down 12 percent, a five-year low for it. Mining company Rio Tinto lost 6.7 percent, amid rumors that it may not be bought by world leader in the sector BHP Billiton.
www.kommersant.com
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Photo: Vasily Shaposhnikov
