Asian markets still in the red; Australian surf wear maker Billabong issues profit downgrade
City Index December 19, 2011 4:00 PM
<p>Asian stocks were down on negative news coming out of Europe when news that North Korean leader Kim Jong Il died, sending markets even lower. […]</p>
Asian stocks were down on negative news coming out of Europe when news that North Korean leader Kim Jong Il died, sending markets even lower.
South Korea’s Kospi 200 index fell more than 4% on the news before recovering. Japan and South Korean leaders plan to hold telephone talks as the Asian trading session wraps up.
The Australian dollar continued its fall against the US dollar, last trading at around 99.18 cents and near its intra-day low. The US dollar briefly rallied against the Japanese Yen before falling back below 78.00, last at around 77.90.
Gold gave away some of Friday’s gains to last settle at around US$1588/lb and copper futures were pointing to similar losses.
North Korea’s leader died of exhaustion brought on by a sudden illness according to the official Korean Central News Agency. While the impact will have little consequences for stocks directly, with North Korea largely an isolated market and economy, confidence across the region could suffer in the face of uncertainty. There doesn’t seem to be any military threat at this stage nor anything substantial to impact regional trade but all eyes are on the tense situation.
There were some opportunistic positions on the news. South Korean defense equipment provider Speco Co. saw a 15% rally in its share price following the news. The conglomerate also produces other civil construction and industrial services products.
Still, traders are cautious about holding stocks going into the holiday period. Around eight shares declined for each that gained on the MSCI Asia Pacific index which was down in excess of 2% in early afternoon Tokyo trading.
Australian listed Billabong International lost 44% after a larger than expected profit downgrade. Resources and energy stocks were also lower on the Australian market.
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