Asian markets on their knees as yen, Wall St. fall
Asian markets on their knees as yen, Wall St. fall
SINGAPORE (Reuters): Asian markets took a hammering yesterday
as a hefty fall on Wall Street and a weakening yen added to a
cocktail of domestic woes.
Hong Kong shares led the rout with the Hang Seng Index
collapsing nearly 500 points, or 5.26 percent, to close below the
9,000 mark as traders faced up to a possible economic recession
in the territory.
Tokyo shares fell 1.4 percent, and stocks in Indonesia and
Thailand plunged around four percent. Regional currencies avoided
big losses but dealers said they were under growing pressure from
the yen's fall and faltering domestic economies.
The only major Asian bourse to close higher was Seoul, but
traders said the small gain was merely a technical rebound after
massive losses earlier this week.
Hong Kong stocks went into freefall from the opening as
traders reacted to a warning by Chief Executive Tung Chee Hwa
that the territory might post negative economic growth, brokers
said.
The blue chip Hang Seng Index saw early falls accelerate on
the back of Wall Street's overnight drop and weak regional
sentiment to close at 8,983.43, its lowest close in four months.
"There is no support. The next level is 8,800 and whether it
can hold or not, we have to wait and see how Wall Street performs
tonight," said Alex Tang, head of research at Core Pacific
Yamaichi International.
Brokers in Tokyo said dealers who had recently built long
positions on expectations of a recovery in the Japanese stock
market unloaded their holdings as the regional mood turned sour
again.
The Nikkei 225 average closed 220.53 points, or 1.39 percent,
lower at 15,664.29.
"There is no fresh selling factor, but the yen's weakness,
strong bonds and the drop in Wall Street stocks overnight have
made investors unwilling to buy shares," a trader at a second-
tier brokerage said.
On Tuesday, the Dow Jones Industrials slid 150.71 points, or
1.65 percent, to close at 8,963.73 on worries over the earnings
of U.S. multinational companies.
The dollar was hovering around seven-year highs around 138 yen
in late Tokyo trade. Despite a rebound in earlier trade, dealers
said the yen -- and with it most Asian currencies -- were likely
to remain under pressure.
Investors worry that the weakening yen will hit exports from
crisis-hit Asian nations and suck the region into another spiral
of currency devaluations.
Shares in Seoul remained blighted by worries about nationwide
strikes, but late bargain-hunting by some investors after two
days of heavy losses helped the main index higher.
The Korea Stock Exchange composite price index ended 1.49
points, or 0.48 percent, higher at 313.48 after having fallen
more than three percent.
Sentiment was given a mild boost after Finance Minister Lee
Kyu-sung said the government would study steps to support the
market, dealers said. But they said the mood remained
pessimistic, thanks to the weak yen and labor unrest at home.
Other Asian stock indices in the firing line were Singapore,
down 1.31 percent at 1295.53; Malaysia, down 1.60 percent at
552.28; the Philippines, off 2.33 percent at 2,060.14; and
Taiwan, down 1.35 percent at 8,068.17.
Australian stocks ended down 1.74 percent at 2,686.4 points in
late business.
Thai stocks had a particularly rough time as foreign investors
dumped local stocks, traders said. The SET index closed down 4.07
percent at 340.12.
Sentiment in South Asia was little better. Indian stocks were
down nearly three percent in afternoon trade and Pakistani shares
slumped around five percent.