Zipped wallets depress exporters

FURTHER signs that US consumers intend to keep their wallets zipped in the face of economic uncertainties kept Asia's major markets under pressure again.

Stocks slipped as Wall Street continued its biggest slide in 19 months after inflation adjusted spending in March rose 0.2%, against a 0.5% gain the previous month. This reinforced the message of the Consumer Confidence Index that US citizens are becoming reluctant to spend.

This is bad news for Asia's big exporters of electronics and motor vehicles, although the prospect that slow spending would limit inflation and cap interest rates gave a slight boost to Hong Kong shares.

In Tokyo, stocks of big exporters fell on fears that recent US demand which has pushed up industrial output could be short-lived. Factory output in March rose by 0.5%, continuing the upward trend shown in February when production rose 1.2% as buoyant US sales prompted Honda, Toyota and Nissan to increase vehicle production.

While big corporations continue to talk confidently about prospects, investors and analysts are not sure and worry that the apparent recovery from last year's record 10% drop in output may not last. Good profit figures from Honda last week kept its shares moving ahead but other exporters slipped. Despite bullish profit forecasts from Sony, its shares tumbled by more than 3%, while leading hi-fi and DVD equipment maker Pioneer slumped 7% after forecasts failed to meet expectations. The Nikkei index was down 48.85 points at 11,492.54 at the close.

Hong Kong stocks were mixed on the US spending data. Bears fretted about the impact on recent high-flying export related stocks, while the bulls cheered the possibility that interest rates would stay low. Property stocks led the way as the Hang Seng index rose 136.09 points to 11,497.58. Shares in Tsingtao Brewery, the mainland beer giant, frothed up almost 6% as investors cheered an 80% leap in first-quarter profits, and looked forward to bumper sales as football fans crowd China's city bars to watch their team's progress in the World Cup.

Taiwan stocks suffered for a fourth day as sellers locked in earlier profits on computer-related stocks and banks and the Weighed Average lost a further 2.4%, down 139.36 points to 6,065.73.

A mild early rally was sustained in South Korea, where the Kospi index rose 3.83 points to 842.34. Shares in Daewoo Motor Sales were weak after General Motors gained control of its parent Daewoo Motor.

Resource stocks provided some antidote to Wall Street woes in Sydney, but the All Ordinaries index still lost 4.7 points to close at 3299.5. BHP Billiton rose on hopes of better ore prices, but News Corporation followed Wall Street's dismal lead.

First-quarter results from DBS Bank put a little life in Singapore stocks, and the Straits Times index added 13.11 points to 1,725.37. Indonesia's market stood out in the region with a gain of more than 1%, as institutions continued to pick up undervalue blue-chips, and the Composite index gained 8.20 to 534.06. In Malaysia the Kuala Lumpur Composite index was up 3.24 points at 793.99 and Thailand's SET hung on to show a gain of just 0.09 at 24.35 points.

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