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Asian stocks slide india halted { April 2004 }

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Asian Stocks Slide, Led by Samsung Electronics; India Halted
May 17 (Bloomberg) -- Asian stocks slumped after oil prices climbed to a 21-year high, threatening to slow global economic growth. Samsung Electronics Co. and Advantest Corp. led declines.

``A rise in oil prices would mean a profit squeeze for companies, which isn't good news,'' said Kiyohide Nagata, who helps manage about $3.2 billion at Invesco Asset Management (Japan) Ltd. in Tokyo.

The Morgan Stanley Capital International Asia-Pacific Index, which tracks more than 850 stocks in the region, shed 2.3 percent to 81.25, its lowest since Nov. 25, at 1:53 p.m. in Tokyo. Except for New Zealand's NZSX 50 Index, all others in the region fell.

UFJ Holdings Inc. led declines among Japanese banks after the Yomiuri newspaper said the lender will report a full-year loss because of provisions for bad loans. The Nikkei 225 Stock Average slid 2.8 percent to 10,548.10.

Taiwan's Taiex Index tumbled 5 percent after China warned President Chen Shui-bian three days before his inauguration for a second term that he must accept Chinese sovereignty or ``face destruction by playing with fire.''

Finance ministers and central bankers at an Asian Development Bank meeting in South Korea said higher oil prices and the prospect of higher interest rates are the biggest threats to the fastest Asian economic growth in four years.

India's Mumbai stock exchange halted trading for an hour after the Sensex slid 10.9 percent. The benchmark had dropped 6.1 percent Friday after the new government, led by Sonia Gandhi's Congress party, said it won't sell profitable state assets.

The Securities and Exchange Board of India, the market regulator, is investigating Friday's decline, it said in a statement obtained by fax this morning.

Boosting Cash

Samsung Electronics, South Korea's largest exporter, plunged 5.1 percent to 466,500 won. Japan's Advantest, the world's biggest maker of equipment used to test computer-memory chips, dropped 4.8 percent to 7,220 yen.

Crude oil for June delivery rose as much as 0.7 percent to $41.65 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 12:12 p.m. Singapore time. June crude oil reached $41.38 a barrel Friday, the highest close in the 21-year history of the contract.

``Historically when oil prices remain high, stock markets haven't done well,'' said Steven Lim, who helps manage about $290 million at Daiwa SB Investments in Singapore. ``Investors will probably go to cash now.''

Crude oil futures may rise for a fourth week, according to a Bloomberg News survey of traders and analysts. Nineteen of 35 respondents, or 54 percent, predicted that the futures will rise this week. Crude oil has jumped 12 percent in three weeks.

Bad Loans

Japan's Topix index lost 2.8 percent to 1060.62, with banks accounting for more than 15 percent of its decline.

UFJ sank 8.1 percent to 514,000 yen. Japan's fourth-largest bank, which on April 28 reported a full-year profit of 78 billion yen ($682.6 million) for the previous fiscal year, is writing down more loans at the urging of the government, Yomiuri reported.

The bank said it's calculating earnings that will be reported on May 24, and detailed figures haven't been set. Executives of the company's UFJ Bank Ltd. unit may have to resign to take blame for the deteriorating earnings, according to the report, without saying where it obtained the information.

Mizuho Financial Group Inc., the nation's largest lender, slid 5.1 percent to 412,000 yen. Mitsubishi Tokyo Financial Group Inc., Japan's second largest, lost 5.9 percent to 820,000 yen.

`Severely Tested'

The Taiex tumbled 278.44 to 5498.88, set for its third day of declines. The last time the index had a bigger slide was on May 5, when it sank 5.4 percent.

Taiwan Semiconductor Manufacturing Co., the island's largest company by market value, lost 4.6 percent to NT$52.50. Hon Hai Precision Industry Co., Taiwan's largest electronics maker, dropped 3.5 percent to NT$124.50.

``China is putting pressure on Chen to make sure he doesn't breach the line when he gives his inaugural speech,'' said Yu Reming, who manages the $148 million Balanced Fund at Prudential Securities Investment Trust Co. in Taipei. ``China is aiming to preempt Chen from pushing for Taiwan's independence.''

Relations between the two are ``severely tested,'' according to a statement issued by agencies of the Communist Party and the State Council, China's cabinet.

The text, published by the official Xinhua news agency, accused Chen of duplicity by pledging to keep the status quo in cross-Strait relations while pushing for independence.

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