Asian stocks dived after a Dubai developer posted a $3.65-billion U.S. loss, Japan’s economy grew less than expected and Greece’s debt rating was reduced.
In Tokyo, the Nikkei 225 Index surrendered 135.75 points, or 1.3%, to close at 10,004.72
In Hong Kong, the Hang Seng Index tumbled 318.76 points, or 1.4%, to 21,741.76
Nakheel PJSC, the Dubai World property developer, posted a first-half loss of 13.4 billion dirhams, according to a document obtained by Bloomberg News. Japan’s gross domestic product rose at an annual 1.3% pace, slower than the 4.8% reported in preliminary figures last month, the government said.
Japan’s gross domestic product report underscored concern about a recovery that is under assault from deflation and a rising yen. Prime Minister Yukio Hatoyama unveiled a 7.2-trillion-yen ($81 billion U.S.) stimulus package yesterday, the first for his Cabinet, to prop up the recovery.
Japan exporters declined as the stronger yen threatened to reduce the value of overseas revenue when converted into their home currency. Nissan Motor Co., an automaker that gets 35% of its revenue from North America, slumped 3.5%. Honda Motor Co. lost 2.1%.
The yen appreciated to as strong as 88.30 against the dollar in Tokyo, compared with 88.43 in New York yesterday.
Australia’s market lost strength as a report showed consumer confidence fell in December. New Zealand’s Index slipped, even as Finance Minister Bill English said the nation’s economic outlook was improving.
Debt restructuring by Dubai state-run companies may almost double to $46.7 billion U.S. as more of the emirate’s businesses need help making payments, Morgan Stanley said. Dubai World, a government holding company that owns 80% of DP World Ltd., said last week it’s in talks with banks to reorganize debt after requesting a creditor "standstill" on Nov. 25.
Nakheel PJSC’s $3.52 billion U.S. of Islamic bonds due Dec. 14 dropped more than 10% yesterday to 46.5 cents U.S. on the dollar, according to Citigroup Inc. Bonds sold by DIFC Investments and Dubai Holdings Commercial sank as low as 44.5 cents U.S. on the dollar after Moody’s Investors Service cut the credit ratings of six state-run companies.
A jump in the cost of DP World’s credit-default swaps implied a 33% risk that the port operator will renege on debt.
Fitch yesterday downgraded Greece’s credit rating one step to BBB+, the third-lowest on its investment-grade scale, and said the outlook for the rating is negative. Standard & Poor’s yesterday put the country’s rating on watch for a possible downgrade.
Elsewhere;
The Shanghai 300 Composite Index let go of 69.54 points, or 1.9%, to 3,554.48
Taiwan’s Taiex index added 28.71 points, or 0.4%, to 7,797.42
Singapore’s Straits Times index backpedaled 8.29 points, or 0.3%, to 2,797.21
Korea’s Kospi index gained back 6.39 points, or 0.4%, to 1,634.17
New Zealand’s NZX Index finished 9.66 points, or 0.3%, lower to 3,127.64
Australia’s S&P/ASX 200 fell 32.70 points, or 0.7%, to 4,637.90
