Sony and Samsung hit as crisis takes toll
Electronics makers Sony and Samsung provided new evidence that the global financial crisis is feeding through to businesses and consumers with gloomy earnings forecasts sending Asian stocks sharply lower.
Latin America seeks to defuse crisisShares in Japan fell to their lowest in 5- years as the stronger yen, which this week has risen the most against the U.S. dollar in a decade, hits the competitiveness of Japanese exporters. Investors looked to safer government bonds.
"There are signs that the panic that gripped developed financial markets just two weeks ago is slowly but steadily taking a back seat. Meanwhile, however, the economic situation is becoming ever more precarious," Dresdner Kleinwort analyst Peter Schaffrik said.
Governments and central banks have committed nearly $4 trillion (2.4 trillion pound) in a variety of schemes including deposit and debt guarantees and taking stakes in struggling banks, to restore confidence after the most severe financial upheaval since the 1930s Great Depression.
In Washington, the Treasury Department and banking regulators plan to announce as soon as this weekend the next batch of banks receiving capital injections as part of its bank bailout package, a source familiar with the Treasury's thinking said.
DISMAL FORECASTS
Sony's shares tumbled 13 percent to a 13-year low after it halved its profit forecast because the fallout of the financial crisis hit demand for its cameras and flat TVs and drives up the yen. The news followed job cut announcements by major U.S. companies such as General Motors and Chrysler, and stirred worries over the earnings of other Asian exporters.
The dollar slid to a 13-year low against the yen as the low-yielding Japanese currency - once widely used as a cheap source of funds to buy higher-yielding riskier assets - soared on investors dumping stocks and higher-yielding currencies on deepening worries of a protracted global recession.
The South Korean won fell almost 4 percent against the dollar, bringing its loss to more than a third since the start of the year, after economic growth hit a four-year low in the third quarter, fanning fears that a global downturn will dent the local economy well into 2009.
The credit crisis, triggered by a wave of defaults on U.S. subprime mortgages, has wreaked havoc across the world's financial markets, bringing down lenders from Wall Street to Iceland and threatening economies worldwide.
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