Asia Sees Red, Japan's Nikkei 225 Plunges 10%Submitted by adam1mc on Wed, 10/15/2008 - 23:57
Asia Sees Red, Nikkei Nosedives on Recession Fears
ASIAN MARKETS, STOCKS, SHARES, NIKKEI, KOSPI, SHANGHAI COMPOSITE, HANG SENG, STRAITS TIMES INDEX, SYDNEY, SEOUL
| 15 Oct 2008 | 07:55 PM ET
Asian markets plunged at the open of Thursday session, with Japan down 10 percent, South Korea down 7 percent and Australia down over 6 percent as fears of a global recession wiped out relative optimism about the credit market and led to a plunge on Wall Street.
U.S. stocks had their worst day since the 1987 stock market crash, as poor economic data fed the pessimistic mood, and shares of economic bellwether companies underperformed the market. The Dow shed almost 8 percent.
Dollar/yen fell below ¥100, while bonds soared as investors sought safer havens. Commodity prices dived, with crude oil prices hitting a 13-month low, on fears a recession would see demand reduced further. Oil futures are currently trading at the $73 a barrel in the early Asian session.
Japan's Nikkei 225 Average plunged as much as 10 percent within minutes of the opening of trade. Underlining the worry, the president of Toyota Motor said on Wednesday that the business environment has deteriorated beyond expectations two months ago when it announced first-quarter earnings and that it was still assessing the impact. Adding to the misery was a weak dollar, set to undercut the exporters that are the backbone of Japan's economy. The dollar was fetching around 99.6 yen.
Seoul shares dropped 7 percent, hit by deepening global economic worries, with banks and exporters leading the slide, while analysts warned the market only just began to price in recession fears. Banks, also laden with concerns about a dollar liquidity crunch, led the slide with KB Financial Group falling 11.3 percent. Credit rating agency Standard & Poor's placed its counterparty credit ratings on major South Korean banks including Kookmin and Woori on CreditWatch with negative implications, citing the banks' ongoing foreign currency funding pressures. Exporters were hit by the growing prospect of a severe worldwide downturn, with steelmaker POSCO tumbling 10 percent and Hyundai Motor falling 7.9 percent.
Australia's S&P/ASX 200 Index fell over 6 percent with resource stocks getting hit hard. BHP Billiton was down 10 percent while Rio Tinto was down 15 percent after the global miner warned of slowing Chinese demand for commodities and signaled a possible delay in plans to sell $10 billion in assets. All four of the top banks fell at least 3 percent, while investment bank Macquarie Group slid 8.5 percent.
Hong Kong shares tumbled over 6 percent with deepening worries over a protracted global economic recession spurring the selloff. Only nine of the total 1088 traded issues were set to open higher, while there were no pre-market bids on 847 other stocks.
Singapore's Straits Times Index fell over 6 percent led by losses in blue chips such as Singapore Telecommunications and CapitaLand. Financials were also hard hit with DBS Group, UOB and OCBC down an average of 5 percent.
China's Shanghai Composite Index slid nearly 4 percent in response to fears of a global recession and tumbles in equities markets around the world. Many analysts believe Chinese authorities, who late last month launched a rescue plan for the market which includes purchases of bank stocks by a government fund, want to prevent the index from falling sharply below the psychologically important level of 2,000 points.
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