Asia Market Report-Nikkei tumbles to six month low

Date: Tuesday 25 May 2010

The Nikkei fell to its lowest level in six months on Tuesday as tensions between North and South Korea escalate.

Fresh worries about Europe’s financial health also kept buyers on the sidelines after news that the Bank of Spain had stepped into rescue one of its biggest regional banks.

Financials took a beating with shares in Sumitomo Mitsui down 3.08%, Mizuho Financial off 1.21% and Mitsubishi Tokyo down 1.58% in Tokyo.

Exporters came under heavy pressure as the yen rose against the euro. Sony fell as much as 4.87%. Canon lost 2.83% while Olympus declined 3.4% to 2,221 yen. Softbank Corp retreated 4.5%. The Tokyo Electric Power Company was a rare gainer.

The Nikkei 225 index closed down 298 points or 3.06% at 9,460 in Tokyo

The Hang Seng also fell on Tuesday on jitters about Europe’s debt crisis and China’s attempts to cool the housing market.

Property plays were down sharply after Friday’s sharp gains. China Overseas Land & Investment declined 4%, Hang Lung dropped 3.8% while China Resources Land skidded 3.6% to HK$14.44 in Hong Kong.

Shares in Prudential fell in its Hong Kong debut on Tuesday. The insurance giant is trying to beef up its presence in Asia as it raises Ł14.5bn through a rights issue to fund its AIA takeover.

The Hang Seng index closed 682 points lower at 18,986.