North Korean news adds to investor fears
BATTLE-WEARY investors were again hit by global headlines yesterday, this time from the Korean peninsula.
BATTLE-WEARY investors were again hit by global headlines yesterday, this time from the Korean peninsula.The main Asian markets lost ground, with Japan's Nikkei 225 retreating 1.26 per cent and Hong Kong's Hang Seng slipping 1.18 per cent.The Australian market was one of the worst performers, with the S&P/ASX 200 Index dropping98.8 points, or 2.4 per cent,to 4060.4.Only South Korea's Kospi Index, which fell 3.4 per cent, was harder hit."Kim Jong-il's death is the latest spanner in the works," said IG Markets market strategist Stan Shamu. "Although a succession plan was already in place, change means uncertainty and uncertainty is not good for markets."Even before news of the dictator's death reached the market, the week had got off to a poor start after the business commentator Alan Kohler said he would reduce his exposure to equities, fearing a looming panic selloff on the sharemarket."I don't know when it will happen and it is not a certainty that it will happen . . . but I think the risk is now such that you must take action," Mr Kohler wrote in his influential Week in View."On Monday I will be significantly reducing my already reduced exposure to equities, possibly to zero."Woodside Petroleum dragged energy stocks lower on signs that work on a gas processing plant in Western Australia's north might not proceed. The company had already delayed making a decision on a $30 billion gas project in the state's Browse Basin so investors pummelled the stock, sending it down $1.06, or 3.4 per cent, to $30.24.BHP Billiton lost 87?, or 2.5 per cent, to $34.32 while Rio Tinto lost $1.60, or 2.6 per cent, to $60.20.Billabong shares plunged 44.2 per cent after the company warned that its first-half profit could fall by as much as 26 per cent. The Australian surfwear manufacturer said earnings before interest, tax, depreciation and amortisation would be between $70 million and $75 million for the six months to December 31, down from $94.6 million in the previous corresponding period. Billabong shares closed down $1.61 at $2.03.The big four banks alllost ground, with Commonwealth falling 84?, or 1.7 per cent, to $48.29,and Westpac losing 46?, or 2.2 per cent, to $20.05.The dollar fell almosthalf a US cent, ending the day on US99.24?, down from US99.70? on Friday.European stocks opened lower but last night were up about 0.5 per cent, with US futures also in positive territory.