Asian Shares, Currencies Slide on Tsunami

Reuters ^ | December 27, 2004 | Anne Marie Roantree

[RWR8189]

SINGAPORE (Reuters) - Asian stocks and currencies fell on Monday after tsunami waves triggered by the world's worst earthquake in 40 years killed nearly 15,000 people and wreaked havoc on tourist beaches.

The yen touched an 18-month low against the euro, falling with emerging Asian currencies as traders tried to assess the economic fallout from the disaster.

Shares in travel-related companies fell across the board as the region counted the cost of tsunamis that devastated areas of Sri Lanka, southeastern India, Thailand, Indonesia and Malaysia.

Thai shares fell 1.5 percent to lead losses in Asia, weighed down by a 3.5 percent drop in Thai Airways.

Singapore Airlines fell 1.7 percent and Malaysian budget carrier AirAsia Bhd dropped 2.3 percent on expectations the devastation would hit travel in the region. "In Southeast Asia, the hardest hit would be Thailand," said Sani Hamid, a currency analyst at 4CAST in Singapore. "It hit the heart of the tourism industry there."

The benchmark index in Thailand, where tourism accounts for about 5 to 6 percent of the economy, has fallen 14 percent this year to rank with China as the region's worst-performing market.

Japan's Nikkei stock index slipped 0.03 percent to 11,362.35, weighed down by a 3.2 percent drop in discount travel agency H.I.S. Co. The index has risen 6 percent this year.

NEC Electronics Corp. tumbled 5 percent after a newspaper said the company, the world's eighth-largest chip maker, was likely to miss its profit forecast for the year to March due to sluggish demand.

FIVE-YEAR HIGH

MSCI's broadest index of Asia Pacific shares outside Japan had dropped 0.2 percent by 0620 GMT, after touching its highest level in almost 5 years in opening trade.

India's Bombay index rose two-thirds of a percent to a record high, led by a 2.9 percent rise in Tata Steel Shares fell 0.4 percent in Singapore, 0.3 percent in South Korea, 0.6 percent in Taiwan and 0.5 percent in Malaysia Indonesian shares were flat Sri Lanka's stock market, the region's best performing this year, was closed as a mark of respect to those killed. Australia and Hong Kong were closed for holidays.

Although the waves did not affect Japan, South Korea or Taiwan, investors there were anxious about the scale of the disaster.

U.S. oil prices slid half a dollar to below $44 a barrel as warmer-than-expected weather in the United States was expected to curtail demand.

The euro bought around 140.55 yen after hitting an 18-month high of 140.70. It fetched 140.27 in late Friday trade.

The dollar moved up to around 103.80 yen compared with 103.70 in late trade on Friday.

The Thai baht eased to around 39.10 per dollar from 38.91 on Friday. The Indonesia rupiah lost half a percent to around 9,310 per dollar

The euro edged up to $1.3540 in sight of Friday's record of $1.3549.

In Japan, chip stocks fell after a Deutsche Securities analyst said global share markets had not yet factored in what looked like a deeper cyclical fall in demand for semiconductors.

Advantest Corp. and Tokyo Electron each fell 1 percent.

Gold held steady in Asia around $442.75 an ounce. Japanese government bond prices eased in holiday-thinned trade, with the yield on the cash benchmark 265th 10-year JGB up three basis points at 1.380 percent.

[drt1]

Calling John Edwards! There MUST be a cause of action against Indonesia for their "Negligence" in allowing the dangerous conditions to exist that led to the earthquake.

Seriously, this is a problem that exists worldwide and that can happen at any time. I wonder why an alert wasn't forthcoming given the magnitude of the quake and the knowledge of the inevitable tidal surge that results from undersea quakes of this magnitude.