Asian shares decline as investors doubt effectiveness of US bailout (AP) (29-09-2008)

TOKYO (AP) -- Asian stock markets fell Monday amid investor skepticism regarding the deal reached in Washington over a $700 billion bank bailout.

Adding to concerns of further global financial contagion was news Sunday that Belgium, the Netherlands and Luxembourg pledged more than euro11 billion ($16 billion) to Dutch-Belgian bank and insurance giant Fortis NV to keep it from insolvency.

Tokyo's Nikkei 225 index was down 1.3 percent at 11,743.61, and Hong Kong's Hang Seng Index shed 2.1 percent to 18,286.90.

Key stock indices in Seoul, Singapore and Sydney also declined, while benchmarks in New Zealand and the Philippines were marginally higher.

In Tokyo trading, exporters Toyota Motor Corp. and Mazda Motor Corp. declined after the Nikkei financial daily reported that the two companies were cutting production in China due to weaker demand. Banks, however remained firm and Mitsubishi UFJ Financial Group Inc. added 2.4 percent, and Mizuho Financial Group Inc. edged up 0.6 percent.

U.S. stock index futures also fell, suggesting Wall Street would open lower Monday morning. Dow Jones industrial average futures were down 0.9 percent at 11,044, while Standard & Poor's 500 index futures were down 1.2 percent at 1,200.

Spiteri of Shaw Stockbroking said that participation in markets recently has been particularly thin.

In currencies, the dollar strengthened to 106.36 yen. The greenback also gained against the euro, which was trading at $1.4499.

Exchanges in mainland China were closed for a national holiday, and Taiwan markets were shut due to a typhoon.

Source: AP