Asian stocks slide on U.S. recession fears


NEW DELHI/TOKYO -- China Mobile, the largest handset provider to the world's No. 1 cell phone market shed 7.48% of its value in Hong Kong on Tuesday proving even giants are defenseless against fears of a U.S. recession.

Asian media and tech stocks drowned alongside other sectors as benchmark markets tumbled region wide a second day, triggered, analysts and brokers said, by rising risk aversion and the unwinding of stock positions financed with borrowed money.

Japan's Nikkei index, made up of the biggest stocks on the Tokyo Stock Exchange, on Tuesday fell 5.7%, the biggest one-day percentage drop since October 1998.

Sony, export-driven and heavily exposed to the U.S. market in its movie, gaming and electronics divisions, saw almost 7% of its valuation wiped out.

"We're monitoring the situation closely but it's too early to say what, if any, long-term impact these market conditions will have on Sony," George Boyd, a Sony spokesperson at the company's head office in Tokyo, said. "This will no doubt be a topic at the press conference when our results are released next week."

Sony's third-quarter 2007 results will be released in Tokyo on January 31.

In India, the Bombay Stock Exchange index Sensex continued to slide Tuesday after crashing Monday by over 1,400 points, its deepest loss ever in a single day.

"This crash is not sector specific but across the board," PricewaterhouseCoopers' Mumbai-based entertainment division leader Timmy Kandhari, said. "There was excess liquidity and coupled with the impact from the U.S. market which is showing shades of a recession, what is happening in India is a correction."

Among the hardest hit in India was Mumbai-based diversified film company and multiplex operator Adlabs Films, whose shares touched a low of Rupees 650 before closing at Rupees 911.85.

With mayhem continuing Tuesday, Kandhari said the correction would take more time, "After all, due to the frenzied bull run of the past, most stocks, including media and entertainment, were over-valued."

East Asian entertainment powerhouse South Korea saw mixed activity in the sector Tuesday. The subindex of broadcasting and telecom stocks under the Korean Composite Stock Price Index closed down 2.07%, showing some resilience to a deeper fall in the broader KOSPI, which fell more than five% to an eight-month low off a record November 1 high. On the KOSDAQ, the recreation and culture subindex also dropped just over five%.

The Hang Seng Index in Hong Kong shed more than 1,000 points a second day in a row Tuesday and China Mobile, the largest wireless phone company in the world with 356 million subscribers and a dominant share of the rapidly growing Chinese wireless market, closed down 7.48%, or HKD8.8 to HKD 108.90.

Nyay Bhushan reported from New Delhi; Gavin J. Blair reported from Tokyo. Mark Russell in Seoul, Jonathan Landreth in Beijing and Reuters contributed to this report.