Asian stocks dive on fears of global fall
Asian stocks dive on fears of global fall
SINGAPORE (AFP): Asia's financial markets, already bruised by
a year of regional turmoil, were battered Friday by the ominous
prospect of a global recession as Russia's economy teetered on
the brink of collapse.
Stocks and currencies dived across the region, as a plunge on
world markets led by Wall Street overnight ricocheted back on
Asian markets.
Japan's Nikkei stock average plummeted to a 12-year low while
the volatile yen sent most other Asian currencies on a
rollercoaster ride.
Manila's bourse was the biggest loser as the country posted
its first quarterly economic contraction since December 1992.
The selling of Asian stocks began with the opening bell as the
region woke up to a dramatic Wall Street decline and a selldown
of currencies across Europe and Latin America after turmoil-
wracked Russia abandoned its last line of defense -- its ruble
currency.
The Dow Jones Industrials think the real issue is whether we
are indeed heading for a global recession," said Deep Kapur,
market strategist at Salomon Brothers Singapore Pte. Ltd.
"The Asian economic outlook is very very, poor. It is so poor
that you don't justify bullishness in stocks markets here and if
as a result of the Russian crisis we see a slowdown in Europe and
U.S., it will further delay recovery in Asia," he said.
Hong Kong on Friday announced that its economy contracted for
the second consecutive quarter, formally joining Japan, South
Korea, Indonesia, Malaysia, and Thailand among recession
casualties.
Singapore and the Philippines are expected to post two
consecutive quarters of negative economic growth by the end of
1998.
Although Asian bourses have been "bombed out" amid the
regional financial crisis since mid-1997, the region's cheap
stocks found no buyers due to fears that corporate earnings would
not recover for at least a year, Kapur said.
Tokyo's Nikkei stock average sank to a 12-year low, closing
down 498.16 points, or 3.5 percent, at 13,915.63.
The Philippine Stock Exchange index lost 72.28 points to
1,194.71, its lowest level in six years and four months, amid
fears of recession sparked by the economic contraction in the
three months to June.
Hong Kong stocks closed the day 1.2 percent lower on record-
breaking turnover as the government poured unprecedented sums of
money into the bourse to squeeze out speculators.
Share prices fell 4.5 percent in Indonesia, 3.5 percent in
Thailand, 3.4 percent in Malaysia, 3.3 percent in New Zealand,
2.8 percent in Singapore, 1. 7 percent in Australia, 1.5 percent
in South Korea and 1.3 percent in Taiwan.