Asia watch

ASIAN airline shares suffered as investors bailed out on fears that the crash of the American Airlines Airbus in New York will add another dent to global travel and slow the US and global economies even further.

Generally Asian markets were quietly calm in line with the close on Wall Street and Nasdaq. Reports that the crash was an accident and not the second terrorist outrage which many had feared reassured most investors and losses were marginal.

But the news proved too much for the already-fragile airline sector, and the Bloomberg index of Asian airline prices dropped 3%, with many local carriers almost doubling that fall. Singapore Airlines and Taiwan's China Airlines lost 5%, Hong Kong's Cathay Pacific lost 2% and Korean Airlines was down 3%.

Australia's Qantas was relatively steady, with a 0.5% loss, but Japan Airlines fell more than 2%, as brokers downgraded the stock in Tokyo following Monday's news that tougher international trading had forced it to merge with the smaller Japan Air System.

The crash was just the latest chapter in a grim year for Asian airlines. They were already reeling from falling traffic that followed the US economic downturn before the 11 September attacks in the US hammered bookings. Bookings in September plunged by up to 40%, and analysts expect the number of passenger miles flown to drop by about 25% over the year, as airlines cancel flights and lay off staff.

Japan's Nikkei 225 Average fell 51 points to 10,030.56, a one-month low, as big exports Sony and Honda Motor lost around 1%. The index was also depressed by a 2.5% loss in shares of mobile phone giant NTT Docomo on reports that it was heading for a US$4.5bn (£3bn) loss.

After an early 130-points fall, the Hang Seng index in Hong Kong later recovered to rise 70.4 to 10,662.8. Main losers were companies with exposure to US markets and the travel industry. Major trader Li & Fung lost 2.5% and HSBC Holdings fell HK$1.25 to HK$88. Locally-quoted mainland airlines followed Cathay Pacific down with falls of around 2%.

South Korea's market shook off the weakness in the national carrier as late buying of semiconductor stocks reversed early losses to leave the Kospi up 1.60 to 586.08. Airlines' losses outweighed rising chip stocks in Taiwan after a good overnight performance in the sector in the US, and the Weighted Average index fell 37.29 to 4135.34.

A revival in Singapore bank shares offset the fall in SIA, but the Straits Times index still fell 4 to 1366.3. Australian stocks recovered from their worst levels, but insurance group QBE, which has big US exposure, tumbled 5%, helping to keep the S&P/ASX 200 down at 3291.7, off 13.7. The All Ordinaries rose 53 to 3291.7.

Selective bargain-hunting kept Malaysian stocks on the rise, and the Kuala Lumpur Composite added 2.26 points to 605.94. Thai investors failed to follow predictions that better earnings figures would boost demand, and the SET index drooped 0.55 points to 271.20, while the Jakarta Composite slipped 3.79 points to 367.57 as investors continued to worry about civil unrest.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.