Most Asian markets fall; Nikkei drops 2.1 percent on Toyota's bleak forecast

Fri, May 9 05:19 PM

TOKYO (AP) _ Most Asian markets fell Friday, with Japan's key stock index dropping more than 2 percent following Toyota's bleak earnings projection. The benchmark Nikkei 225 index sank 2.

1 percent to 13,655.3.

Hong Kong's blue-chip Hang Seng Index fell 1.5 percent to 25,063.

2, extending its losing streak to a third straight session. In Tokyo, sentiment was downbeat throughout the day after investors were jolted by Toyota Motor Corp.

's announcement Thursday that its fiscal fourth quarter profit dropped 28 percent from a year ago and that it expected this fiscal year's profit to tumble 27 percent. That would be the carmaker's first decline in annual earnings in seven years.

"Investors were spooked by Toyota's sluggish earnings reports and its weak profit outlook," said Tsuyoshi Segawa, an equity strategist at Shinko Securities Co. in Tokyo.

Toyota dropped 3.3 percent, and other Japanese automakers also got hit.

Nissan Motor Co. fell 1.

6 percent and Honda Motor Co. lost 3.

9 percent. Sony Corp.

was also down, dropping 3.1 percent.

Internet and mobile phone provider Softbank Corp. fell 2.

7 percent, even though it said Thursday that its net profit more than doubled in the fiscal fourth quarter. In Hong Kong, investors dumped stocks in the real estate sector, spooked by losses in Chinese markets.

"Hong Kong shares are in lockstep with Chinese shares," said Francis Lun, general manager of Fulbright Securities. The benchmark Shanghai Composite Index dropped 1.

2 percent to 3,613.5 points.

The Shenzhen Composite Index fell 0.5 percent to 1,097.

4. The Shanghai benchmark fell as much as 2.

9 percent earlier in the day after the government reported that the producer price index, a key inflation indicator, rose 8.1 percent in April compared with the same month a year ago.

The rise in producer prices prompted worry that April consumer pricing data due Monday will show a persistently high rate of inflation and that Beijing will respond with further tightening of its monetary policy. Among losers in Hong Kong, property firm Sino Land plunged 4.

3 percent and Hang Lung Properties dropped 3.1 percent.

In Shanghai, financial and property shares, those most acutely affected by monetary policy, led the decline. Industrial & Commercial Bank of China fell 2.

7 percent, China Merchants Bank slipped 1.7 percent and property leader China Vanke shed 1.

1 percent. Shares in Asian airlines were also under pressure as investors worried record high global oil prices could affect carriers' operation costs and earnings.

Hong Kong airline Cathay Pacific sank 4.2 percent, while Japan Airlines fell 1.

6 percent in Tokyo. Japan Airlines in its earnings report said Friday that it had reduced losses in the January-March quarter from the same period last year on cost cuts, but it still forecast lower profit for this fiscal year, blaming soaring fuel costs and intense competition Elsewhere in Asia, major stock benchmarks fell in India, Indonesia, New Zealand, Singapore, South Korea, Taiwan and Thailand.

Benchmarks in Australia, Malaysia and the Philippines bucked the regional downtrend to close higher. In Tokyo currencies, the U.

S. dollar was quoted at 103.

10 yen at 5:00 p.m.

(0800 GMT) by the Bank of Japan, down from 104.17 yen in New York late Thursday.

The euro stood at US$1.5466, up from US$1.

5404 late Thursday in New York.

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