SINGAPORE (Thomson Financial) - (Updates with closing figures throughout)
Asian stocks closed mostly lower in subdued trade Monday with Wall Street closed for a public holiday and Australia falling after the third-largest bank Australia and New Zealand Banking Group said it would book losses on bad loans and exposure to a US bond insurer.
'We're in an environment where the market doesn't deal with disappointment very well,' said Justin Gallagher, head of sales trading at ABN Amro in Sydney.
'If you're in the financial sector you're probably under a little bit more scrutiny than some of the other sectors. That safe haven tag (the banks) have enjoyed for a long time is not appropriate at the moment.'
The S&P/ASX 200 closed down 0.9 percent at 5,558.4 and the All Ordinaries was down 0.8 percent at 5,634.0.
ANZ slid 6.1 percent to 22.46 Australian dollars, after Chief Executive Michael Smith said the bank was taking a 200 million US dollar one-off loss provision relating to a troubled US monoline bond insurer.
The Nikkei closed up 0.1 percent at 13,635.40, shedding most of its early gains. The broader Topix was down 0.1 percent at 1,332.99.
The Hang Seng closed down 1.6 percent at 23,759.25, ending a four day winning streak.
'There is still no evidence that the housing and financial sectors in the US are getting better, so investors will remain cautious,' said Francis Lun, general manager at Fulbright Securities.
Elsewhere, the Kuala Lumpur Composite closed down 1 percent at 1,412.83 and the Philippines Composite lost 0.6 percent to 3,163.25. The Singapore Straits Times closed down 0.2 percent at 3,083.34 and the Jakarta Index closed down 0.1 percent at 2,684.70.
India's Sensex provisionally closed down 0.4 percent at 18,048.17.
The Shanghai Composite bucked the downtrend, gaining 1.6 percent at 4,568.15.
The official Shanghai Securities Journal reported that Bank of China Investment Management Co and AXA SPDB Investment Managers have won approval to launch two new open-ended stock funds.
Separately, nine fund management firms were reportedly given the go-ahead to offer wealth management services to institutions.
The Kospi rose 0.1 percent to 1,696.24 and the Taiwanese Taiex was up 0.2 percent at 7,890.90.
ANZ slumps
The Dow Jones Industrial Average closed down 0.2 percent at 12,348.21 on Friday after data showed declines in consumer confidence and factory activity in the New York area.
Consumer electronics retailer Best Buy cut its outlook for 2008, citing weak customer traffic in January, adding to the gloom.
Investors are looking ahead to US consumer price data due this week as well as results from Wal-Mart, the world's biggest retailer.
A homebuilder survey due on Tuesday and housing starts due Wednesday are expected to show continued stress in the housing market.
Meanwhile, investors will keep a close eye on the bond insurance market after New York Governor Eliot Spitzer warned last week that the big monoline insurers need to take swift action to recapitalize and keep their crucial Triple A ratings.
ANZ is the first bank to disclose losses related to the recent downgrades of the bond insurers.
CEO Smith said the bank expects losses arising from the global credit crunch to wipe out profit growth this year, describing the crunch as 'a financial services bloodbath.'
The bank's revelations have caught the market by surprise, said ABN Amro's Gallagher.
'I guess the problem the market is having is that we've been led to believe that everything is okay and that certainly isn't the case. We're seeing evidence now that the bad and doubtful debt provisioning is a bit conservative,' he said.
'While they are saying there is no subprime exposure, that's almost irrelevant in the sense that there are other issues coming to the surface that are having a similar impact.'
ANZ said it's also exposed to other bad loans including 90 million Australian dollars lent to a commercial property group and 50 million dollars lent to a resources group. That brings its total potential losses to more than 360 million dollars.
Other Australian banks fell in sympathy with ANZ. Commonwealth Bank shed 5.1 percent to 44 dollars, National Australia Bank closed down 3.7 percent to 29.51 dollars and Westpac Banking Corp fell 3.7 percent to 22.50 dollars.
Toshiba rallies
In Tokyo, Toshiba closed up 5.7 percent at 829 yen, on reports it's considering abandoning its HD DVD format for high definition DVDs as it's losing the battle for market dominance to rival Sony Corp's Blu-ray format.
Analysts said the move would mark the end of a long battle over next-generation DVD formats between Toshiba and the Blu-ray camp led by Sony Corp and Matsushita Electric Industrial Co.
On Friday, Wal-Mart announced it would shift to exclusively selling movies on Blu-ray.
Weekend reports said losses for Toshiba could reach tens of billions of yen if it decides to pull out.
Sony closed up 1 percent at 4,900 yen.
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news source : http://www.forbes.com/markets/feeds/afx/2008/02/18/afx4665713.html
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