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.