Asian stocks fell after South Korea's president was impeached and bombings in Spain raised concern about the threat of terrorism. Hyundai Motor Co. had its biggest decline in more than a month. ``It's pretty shocking news that no one expected to actually happen,'' said Lee Chae Kwang, who manages $1.4 billion as chief investment officer at Hanil Investment Trust Management Co. in Seoul.
Travel-related shares such as Qantas Airways Ltd. dropped after at least 192 people were killed in train bombings in Spain. Exporters such as Toyota Motor Corp. also slid on concern terrorists may target countries including the U.S. and Japan and damage consumer sentiment. The MSCI Asia Pacific Index, benchmarked by $500 billion worth of funds globally, shed 1.8 percent to 88.67, set for its worst weekly drop in almost four months, at 1:30 p.m. in Tokyo. ``The market's major concern is that the next terrorist attacks may take place soon,'' said Yasushi Morikawa, who helps manage the equivalent of $110 billion at Sumitomo Mitsui Asset Management Co. in Tokyo. All benchmarks in the region declined, apart from those in New Zealand. The Bloomberg Asia Pacific Travel Index, consisting of 27 airlines, hotels and leisure stocks, fell 2.2 percent.
Impeachment
South Korea's Kospi index tumbled 4.6 percent to 829.60, suffering its steepest loss in 1 1/2 years, after the nation's lawmakers voted to impeach President Roh Moo Hyun for alleged election-law violations. Hyundai Motor, South Korea's biggest carmaker, slid 3.5 percent to 48,350 won, the biggest drop since Feb. 3. Samsung Electronics Co., the nation's largest company by market value, fell 2.3 percent to 522,000 won. President Roh Moo Hyun was impeached by lawmakers, who accused him of breaking laws that bar the president from publicly taking sides in parliamentary elections. Roh will be suspended from office for six months as the Constitutional Court considers his case. Prime Minister Goh Kun will become acting president during the suspension. Travel Shares Qantas, Australia's biggest airline, shed 3.4 percent to A$3.45. Flight Centre Ltd., the nation's biggest travel ticket agency, dropped 1.1 percent to A$18.45. All Nippon, Japan's biggest domestic carrier, slumped 3.4 percent to 342 yen. Singapore Airlines Ltd., the world's No. 5 carrier by market value, lost 1.8 percent to S$11. Cathay Pacific Airways Ltd., Asia's No. 6 airline, shed 2.3 percent to HK$15.10. ``Whenever you have a terrorist event, it causes a psychological shock, and on an economic level it's logical travel- related stocks will suffer,'' said Hans Goetti, a Singapore-based manager for private banking clients at Citigroup Asset Management, which oversees $463 billion globally. Al-Quds Al-Arabi, London-based Arabic newspaper, received a letter, attributed to al-Qaeda, claiming responsibility for the blasts and saying an attack on the U.S. is almost ready. Spain has blamed the Basque terrorist group ETA for yesterday's attack. Al-Qaeda also threatened to attack Japan, the U.K. and Italy in the letter, the Sankei newspaper reported, citing a French radio broadcast. Toyota, which gets 80 percent of its operating profit from North America, slid 1.8 percent to 3,800 yen. Sony Corp., which sells more than a quarter of its consumer electronics to the U.S., shed 1.8 percent to 4,350 yen.
Direct Threat
``The Spanish bombing came at a time when the threat of terrorism globally had been receding so it's shocked investors,'' said Koichi Seki, an equity manager at Chuo Securities Co. in Tokyo. ``Overseas investors had been concerned about the potential threat directly to Japan.'' U.S. retail sales fell 2.4 percent in September 2001, the largest drop in almost 10 years of record-keeping, following the terrorist attacks in New York and Washington. ///www.bloomberg.com