(Updates prices, adds detail on China, Hong Kong)
By Tom Miles
HONG KONG, April 14 (Reuters) - Asian shares lurched lower
on Monday as a nasty earnings surprise from General Electric Co
<GE.N> and a 26-year low in U.S. consumer sentiment drowned out
the Group of Seven nation's support for the dollar.
But the dollar's gain helped push U.S. crude oil <CLc1>
back below $110 a barrel, trading down 52 cents at $109.6 by
0340 GMT. Gold prices <XAU=> fell 1 percent to $917.10/7.90 an
ounce as the dollar's rise outweighed buying of the safe-haven
asset.
After six months of red ink, equity investors are aching to
feel the bottom of the market, the moment to pick up value
stocks at a bargain.
But their tentative forays into buying have been snuffed
out again and again by signs of a U.S. recession that could
hurt companies worldwide.
GE's unexpected 6 percent profit drop on Friday was the
biggest shock yet to the U.S. industrial sector from the credit
crisis and cast a shadow over the upcoming quarterly earnings
season. []
Shares of GE, viewed as an economic bellwether because of
the range of its businesses, sank almost 13 percent in their
worst decline since the October 1987 market crash.
"The fact that it missed expectations really has spooked
investors that the reporting season is going to show that the
slowdown in the U.S. is impacting corporate profits much more
than was expected," said Juliette Saly, a market analyst at
CommSec.
The mood was worsened by April's preliminary index of
confidence from the Reuters/University of Michigan Surveys of
Consumers which hit its lowest level since 1982, when the
economy was plagued by low growth and high inflation.
[]
MORE BETS ON DEBT
Japan's Nikkei average index <> was 2.8 percent lower
while shares across the rest of Asia, gauged by MSCI's index
<.MIAPJ0000PUS>, fell 2 percent.
Hong Kong's Hang Seng index <> fell 3 percent after a
report in the South China Morning Post newspaper said Hong
Kong-listed firms such as China Mobile <0941.HK>, CNOOC
<0883.HK>, Lenovo <0992.HK> and China Netcom <0906.HK>, would
not be allowed to list in Shanghai this year.
Shanghai's main index <> fell 4.4 percent, weakened by
worries about Chinese inflation.
The same fears sapped investors' appetite for Shanghai zinc
<SZNM8> and copper <SCFM8>, while the stronger dollar and
gloomy economic outlook weighed on commodities markets across
the board.
The rocky ride for the U.S. stock market may intensify this
week, with earnings reports from JPMorgan Chase <JPM.N>,
Merrill Lynch <MER.N>, Citigroup <C.N> and other large banks
and financial services companies, as well as reams of economic
data.
The jitters in stocks pushed up Japanese government bond
futures more than a half point as investors shifted money back
into debt. June futures climbed 0.65 points to 139.96 <2JGBv1>
after jumping as high as 140.01. The benchmark 10-year yield
fell 3.5 basis points to 1.340 percent <JP10YTN=JBTC>.
BUCK UP
The slide in stocks came despite a stronger dollar,
normally a signal of improving export markets and a comfort to
Asian investors.
The dollar rose on Monday after the G7 nations surprised
investors by expressing concern about sharp swings in major
currencies, with at least an implied threat that authorities
could step in to prop up the dollar through foreign exchange
intervention. []
"Since there was an expression of concern against sharp
fluctuations, there is a chance in the near term that the
dollar will be bought back, especially against the euro," said
Haruhisa Takagi, head of FX spot trading at Sumitomo Mitsui
Banking Corp.
"But whether there actually will be any joint action is
questionable at a time when there is no consistency in the
direction of monetary policy in the United States and Europe,"
Takagi said.
The euro fell as low as $1.5658 <EUR=>, traders said, down
from around $1.5810 in late U.S. trading on Friday and pulling
away from a record high of $1.5915 hit on electronic trading
platform EBS last week. After trimming some of its losses, the
euro stood near $1.5720 <EUR=>.
The dollar rose as high as 101.97 yen <JPY=> earlier, up
from around 101.00 yen in late New York trade, but later
trimmed its gains to stand at 101.12 yen.
