Asian stock markets decline on fears of U.S. economy
Asian stock markets decline on fears of U.S. economy
Agencies, Jakarta
Asian stock markets tumbled Tuesday following another bad day on Wall Street after more evidence emerged the U.S. economic recovery is faltering.
The Nikkei-225 average of the Tokyo Stock Exchange sunk closer to an 18-year low, losing 2.1 percent or 203.91 points to end at 9,501.02, while Hong Kong hit a 10-month low.
The fall in the Japanese shares sent other markets in the region including Hong Kong, Singapore, South Korea, Malaysia, the Philippine, and Jakarta to also close lower.
"Given the deepening anxiety over the trend of the U.S. economy, which affects severely the business performance of Japanese hi-techs, as well as automakers, investors do not dare invest their money in these stocks, even if the underlying earnings fundamentals are improving," Kunihiro Mita, senior managing director at Japan's Mita Securities, was quoted by AFP as saying.
In New York Monday, the Dow Jones industrials average dived 3.2 percent to close at 8,043.63 after fresh data showed growth in the services sector slowing. The technology-laden Nasdaq dropped 3.4 percent to 1,206.01.
But U.S. stocks rallied at the open on Tuesday, driving the tech-loaded Nasdaq 2 percent higher, as investors rummaged through the wreckage of a market slammed near five-year lows by a string of sharp declines.
Investors are eying cheap shares after the Nasdaq slammed to its lowest close since April 1997 on Monday, wiping out the rally it scored at the end of July. As stocks skid and bonds rally, speculation is growing that the Federal Reserve will unleash yet another interest-rate cut to revive the economy.
After suffering losses earlier in the day, European shares reversed course later on Tuesday on signs that Wall Street would open higher.
Positive U.S. stock futures, which indicated a stronger start for U.S. blue chips, offset worries about a possible "double dip" recession for the world's biggest economy.
After falling as much as 2.4 percent in early trade, the FTSE Eurotop 300 index was up 2.0 percent at 906.48, just off session highs. The narrower DJ Euro Stoxx 50 index was up 2.61 percent.
Sentiment was also lifted by speculation the U.S. Federal Reserve could cut rates at next week's FOMC meeting.