Reply #3: Jerky indeed in Asia. Let's see: Asian Stocks Decline as Growth Concerns Eclipse Fannie Rally

[Ghost Dog]

Sept. 9 (Bloomberg) -- Asian stocks fell, paring gains a day after the benchmark index's biggest rally in seven months, as concern that global economic growth is slowing drove down materials, shipping and financial companies.

...

``Yesterday's rally wasn't sustainable,'' said Daphne Roth, Singapore-based head of equity research in Asia at ABN Amro Private Bank, with about $30 billion of Asian assets. ``The slowdown emanating from the U.S. has spread to the rest of the world and shipping companies are feeling the effects.''

The MSCI Asia Pacific Index dropped 2.1 percent to 118.80 as of 3:22 p.m. in Tokyo, following yesterday's 3.9 percent surge. About five stocks declined for each one that rose, sending all but one of the 10 industry groups lower.

...

Japan's Nikkei 225 Stock Average lost 1.8 percent to 12,400.65. Taiwan's Taiex Index fell 3.5 percent, the region's biggest decline. BNP Paribas cut its rating on the country's equities to `neutral,' saying valuations are `no longer cheap' compared with Asian peers.

...

All other regional benchmark indexes declined apart from China and New Zealand, which was little changed. Standard & Poor's 500 Index futures were down 0.4 percent recently.

...

Sell Into Strength

Andrew Garthwaite, chief global equity strategist at Credit Suisse Group, said in a note dated yesterday investors should sell into the share rally sparked by Fannie and Freddie as U.S. and European economies will remain weak.

Global equity rallies fueled by U.S. government action have petered out in the past. When the Federal Reserve cut its discount rate in August 2007, global stocks climbed for two months, only to have those gains wiped out by January. The process was repeated with the March bailout of Bear Stearns Cos., with the MSCI World Index advancing 13 percent in the following two months, before losing 19 percent by the end of last week.

``The relief package doesn't spell the end for falling home prices in the U.S.,'' said Hiroshi Chano, who helps manage $7.3 billion at Yasuda Asset Management Co. in Tokyo. ``The government is now assuming the financial risk for Fannie and Freddie to the detriment of its own balance sheet.''

/... http://www.bloomberg.com/apps/news?pid=20601080&sid=awp52KJep.Pg&refer=asia