Posted on 11/21/2007 1:08:48 AM PST by bruinbirdman
Hong Kong shares closed sharply lower Wednesday as investors were unnerved by the slump in markets across Asia while crude oil prices hit record highs.
Sentiment was hit initially by the volatile trend on Wall Street after the Federal Reserve cut its growth forecast for the US economy next year on concern over the housing sector and the credit crunch.
Adding to the market's woes, oil prices rose briefly above 99 US dollars per barrel in the course of the day's trade for the first time ever as the greenback's fall drove demand for dollar-denominated crude.
The Hang Seng Index was down 1,153.02 points or 4.2 percent at 26,618.19, off a low of 26,500.54.
The Index gained 1.1 percent on Tuesday on hopes that the Fed would present an upbeat outlook on the US economy.
Volume was 14.81 billion shares worth 128.82 billion dollars.
'The market is still hounded by a lot of negative news, including a slowing US economy and the overheating Chinese economy,' said Alex Tang, research head at Core Pacific Yamaichi.
Fear that China will raise interest rates further and cap real estate lending dragged down mainland stocks.
The Hang Seng China Enterprises (otcbb: CSHEE.OB) Index was down 873.88 points or 5.2 percent at 15,993.50.
The financial markets had broadly shrugged off the long-term risks of higher oil prices and the inflation readings in Asia have remained muted.
But economist warned that higher oil prices will not just have an inflationary effect in the longer term but also an eventual deflationary effect on economic growth.
HSBC (nyse: HBC) economist Frederic Neumann said that Asia appears more vulnerable than most other economies, given not only its highly intensive energy requirements, but also its reliance on net exports as a driver of economic growth.
'The real risk of oil is not just that it drives up headline inflation, but that it will ultimately dampen the heady economic growth rates currently enjoyed across the region,' he said.
Local property plays and financials were hit by the uncertainity in the global financial markets.
The property index was down 1,865.95 points or 5.3 percent at 33,629.97.
Realty major Sino Land was 1.85 dollars or 7.5 percent lower at 22.80 dollars, while Hong Kong's biggest property developer Sun Hung Kai Properties (other-otc: SUHJY.PK) dropped 8.70 dollars or 5.8 percent to 141.10.
Cheung Kong (other-otc: CHEUY.PK) (Holdings), Hong Kong tycoon Li Ka-shing's flagship property company, fell 8 dollars or 5.7 percent to 131.70 dollars.
Index heavyweight HSBC Holdings was down 2.07 dollars or 1.6 percent at 131.80 dollars while China Mobile (nyse: CHL), the world's largest wireless carrier, slid 5.40 dollars or 4 percent to 129 dollars.
Airline stocks also took a beating as oil prices moved back into record territory.
Air China, China's biggest international carrier, fell 36 cents or 4.2 percent to 8.16 dollars. China Southern Airlines, the biggest carrier, was down 40 cents or 4.7 percent at 8.04 dollars. China Eastern Airlines, the smallest of the mainland carriers, lost 39 cents or 6.5 percent at 5.66 dollars.
Taiwanese handset component manufacturer Foxconn International Holdings, stood out as the only gainer in a sea of red counters. The stock moved 18 cents or one percent higher to 18.48 as analysts took a positive view of its decision to buy a 20 percent stake in South Korean company Diabell Co.
'The acquisition should strengthen FIH's component technology in hinges, window lens, keypads
and microphone. Both hinges and keypad are higher value-added components that should strengthen FIH's design capabilities,' said KC Kao, analyst with Deutsche Bank (nyse: DB).
The acquisition is expected to help the company better service its South Korean customers like LG and Samsung, said Kao.
(1 US dollar = 7.8 Hong Kong dollars)
How someone doesn’t already come up with cheap clean energy to retire oil is remarkable.
They are saying that if OPEC would boost production by another half million barrels, it would probably drop oil quite a bit. OPEC is actually worried it would crash the market for oil altogether.
In 1995, the republicans passed and sent to the president a bill opening up ANWR.
By the most PESSIMISTIC estimates, ANWR would be producing a million barrels of domestic oil a day for us right now.
Clinton vetoed it, and we’ve never been able to get that close again.
Sure, we need replacements for oil, but you are NOT going to replace something until it is expensive enough to make it worth while, and in the meantime it’s going to cause some degree of pain. Without pain there is no reason to endure the pain of doing something new.
I bought two hybrid cars to replace my car and van. I use about 1/3 the gas I used 6 years ago.
If everybody did that, we’d crush the oil import market. I didn’t do it because government forced me to, I did it because a car is just a car, and if I can get from point A to point B at a 3rd of the cost, it’s stupid not to.
I’ve cut my energy use in my house as well, both electric and heating, through simply commonsense steps.
We already can generate all the electricity we need with cheaper, cleaner nuclear energy, if we just get the will to do it — we don’t need someone to “come up with” anything other than a way to get past the democrats who want to destroy our country in the guise of saving us from “bad energy choices”.
It is useful to understand that oil is solar energy.
Oil is the most dense solar battery mankind has ever seen. All the sun’s energy absorbed by those plants and animals that were subjected to millennia of compression and heat below ground to liquify it. Now we pump up that battery and drain it for energy.
So . . . do not glibly think alternatives should exist. What people are actually looking for is a less effective energy source. It’s very hard to go backwards technologically.
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