Australia's stock market experienced a volatile week, with investors dumping shares of two of the country's biggest companies. On Friday, the largest telecom company, Telstra, announced a $500 million loss in a joint investment with Hong Kong's dominant telecom company, PCCW.
The news sent Telstra stock down four percent to a new five-year low. Chief executive Ziggy Switkowski said Telstra will write off the value of the troubled joint venture, known as Reach. "Our view is that the outlook in this industry is sufficiently uncertain and that the right thing to do is to take the value of our investment down to zero," he said.
Thursday, Australia's national air carrier, Qantas, warned of a dim outlook in the event of war in Iraq. Forward bookings on its key routes have slumped, and the company says it may cut as many as 2,500 jobs.
On Friday, however, a last-minute surge in bank shares helped the benchmark ASX 500 index close at 2,820, roughly unchanged from a week ago.
The Telstra write-off triggered selling in PCCW shares in Hong Kong, and the stock lost five percent Friday. Hong Kong's Hang Seng index shed 1.5 percent on Friday to close the day at 9,250. The index was still up half a percent from last week, however.
Weak U.S. economic data and an unfolding investigation into one of South Korea's largest conglomerates, the SK Corporation, dampened trading in that country's shares. The Kospi fell one-third of a percent Friday to 603, but was up nearly five percent for the entire week.
Investors in Japan sold shares of exporters on the back of a strengthening yen. Entertainment giant Sony and Toyota Motors both dropped more than two percent. The Nikkei 225 lost two percent from last Friday's close, to end at 8,513.