Slowdown signs shake exporters

SHARES in Asian exporters trembled on further evidence that the US economy will not be coming to the rescue of their bottom lines this year. Figures showing that US manufacturing output was growing at a snail's pace undermined any hopes of a rapid economic rebound.

Falls of 2.6% on the Dow Jones Industrial Average and 3.6% on the Nasdaq greeted the latest factor index from the Institute of Supply Management and were rapidly translated into further declines in the region's major markets. In Japan, traders backed off from the market, so the damage in thin trading was limited to a fall of 83.85 points to 9709.66 at the close, but this disguised some hefty losses among leading exporters. In Hong Kong, the Hang Seng index dived straight back through 10,000 with a fall of 188.3 points to 9991.7.

After mediocre earnings reports from Japan's major consumer electronics goods makers and big falls in US electronics stocks overnight, Sony shares gave up another 2% while chip giant and computer maker NEC tumbled almost 5% to a near nine-year low.

The only good news in Tokyo was a decision to introduce new bank notes, expected to require heavy modifications to the millions of vending machines which dispense everything from cold beer to hot soup and ladies' underwear. Shares of vending machinery and cash counting devices jumped by as much as 16%.

In Hong Kong the smell of burning plastic polluted the atmosphere for bank stocks after bloated credit card defaults dragged profits of Bank of East Asia down 22% in the six months to the end of June. BEA's shares tumbled more than 2.5% after brokers Merrill Lynch and Goldman Sachs slashed their full-year earnings estimates for the bank.

Shares in other banks suffered as they lined up to present results that will be further grim reminders of the poor state of the Hong Kong economy. HSBC Holdings, due to present interim figures on Monday, shed HK$1.75 to HK$86 after its shares were hit in London by disappointing results from Barclays. Stocks of exporters to the US were in the front line of the sell-off, with textiles trader Li & Fung down more than 2%.

South Korea's Kospi index pared back initial losses, but was still 10.94 points lower at 696.86 as electronics groups wilted on the darkening outlook for exports. Samsung Electronics, the country's biggest chipmaker, fell 2.2%, but was saved from worse by moves to buy back its own shares.

Taiwanese suppliers of components to American computer makers bore the brunt of selling-which took the Weighted Average down more than 2%, before some bargain hunting eased the loses to leave the index off 6.74 points at 4909.85.

Dimming prospects for world commodity prices in the face of a long climb back by the US economy hit resource stocks in Sydney, but the All Ordinaries index gained 35.2 points to close at 3059.3.

South East Asian markets sank, the Straits Times index in Singapore down 5.2 points to 1511.8 and Malaysia's Kuala Lumpur Composite index off 3.57 points at 720.0. Thailand's SET index fell 3.6 points to 373.08, and Indonesia's Jakarta Composite shed 4.51 to 456.77.

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.