Swine Flu Fears Sink Asian Markets - NBC4 Washington

Swine Flu Fears Sink Asian Markets



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    Asian stocks fell for the second consecutive day Tuesday.

    HONG KONG – Asian stock markets fell for a second day Tuesday as uncertainty over the economic toll of swine flu inspired more caution among investors.

    The disease, which broke out in Mexico just days ago, has spread to Europe and testing of suspected cases was underway in Asian countries, including South Korea and New Zealand. As governments everywhere toughened their precautions, the World Health Organization raised its global alert level in a move that could lead to more trade and travel restrictions.

    While the disease has been relatively contained so far — with all 150 suspected deaths and most of the some 2,000 infections in Mexico — investors seemed loath to take on more risk and pocketed gains from the market's recent rally. Drug makers jumped while airlines and other travel-industry companies took another hit.

    "Sentiment has improved a lot since March, but it's still in a fragile state at this point," said Kelvin Lau, regional economist at Standard Chartered in Hong Kong. "Many people are still pessimistic, and given the swine flu, sentiment could see another dip."

    Swine flu wasn't the only distraction for investors, already uneasy about the results of the U.S. government's stress tests to gauge the health of the largest 19 banks. The reports are set for release Monday, though Bank of America and Citigroup have been told by regulators the two will likely need to raise more capital, according to a Wall Street Journal report.

    After wavering in early trade, most Asian markets trended lower.

    Japan's Nikkei 225 stock average lost 152.73 points, or 1.8 percent, to 8573.61, and Hong Kong's Hang Seng shed 204.74 points, or 1.4 percent, to14,635.68.

    Elsewhere, Korea's Kospi retreated 2.2 percent to 1,309.81. Shanghai's main index was down 0.7 percent, Taiwan's stock measure dropped 1.8 percent and India's Sensex slipped 0.6 percent. Australia's benchmark was little changed.

    Wall Street was similarly cautious overnight.

    The Dow Jones suffered its first drop in three days, falling 51.29, or 0.6 percent, to 8,025.00. Broader stock indicators also closed lower. The Standard & Poor's 500 index fell 8.72, or 1 percent, to 857.51.

    U.S. markets were headed for more losses after Wall Street futures dropped sharply. Dow futures fell 82 points, or 1 percent, to 7,920 and S&P 500 futures lost 11.8, or 1.4 percent, to 845.

    Oil traders, also mulling the fallout from swine flu, sent crude prices lower, with the June contract falling 98 cents to $49.16. Prices shed $1.41 overnight to settle at $50.14.

    In currencies, the dollar weakened to 96.15 yen from 96.37. The euro slipped to $1.3005 from $1.3029.