Asian stocks plunge after Wall Street drop

Asian stocks plunge after Wall Street drop

SINGAPORE (AFP): Investors across the Asia-Pacific dumped shares yesterday after being spooked by the steep plunge in Wall Street and the specter of war in the Taiwan Straits.

Nerves calmed toward the end of trading, but traders said market sentiment will depend on how Wall Street performs when it reopens after the Dow Jones Industrial Average dropped a steep 171 points or three percent last Friday.

This plus Chinese missile tests off Taiwan and news that a US aircraft carrier was steaming toward the region jarred Asian investors and set off the biggest drops in recent years in some markets.

Local factors contributed to dampen investor sentiment.

"If Wall Street holds steady tonight then we might see a rebound," said Christopher Chong, director of research at Kay Hian-James Capel Pte. Ltd. in Singapore.

Hong Kong share prices closed 7.3 percent down after panic- selling sent the Hang Seng index plummeting 820.34 points to 10,397.45 despite a slight rally in afternoon trading.

"You are seeing the effect of the China-Taiwan problems," Ian Perkin, assistant director of the Hong Kong General Chamber of Commerce said.

Ironically, Hong Kong suffered much more than the Taipei bourse, where share prices fell 2.0 percent as nervous investors dumped stocks on the eve of another round of Chinese military exercise off the island's coast.

The Taiwan Stock Exchange weighted price index fell 98.08 points to 4,711. 43. The nosedive in Hong Kong also dampened market sentiment in Taipei and accelerated the downturn toward the end of the session, a dealer said.

Japanese share prices plunged 1.8 percent on selling of both stocks and futures following the Wall Street slump. The Nikkei stock average dropped 359. 58 points to finish at 19,796.29.

In Singapore, the Straits Times Industrials (STI) index fell more than 106 points or over four percent by mid-afternoon before recovering. Lower than expected company results, especially from the banking sector, helped set off the tumble.

Even the Shanghai Stock Exchange composite index fell 0.9 percent or 5.01 points to 568.12 points Monday.

"We heard there was an announcement by the People's Liberation Army on the missile exercise. That brought the Hong Kong and Taipei markets down and affected the Shanghai market," said Cui Feng, an analyst with Shanghai Guotai Securities company.

The Australian Stock Exchange's key indicator, the all ordinaries, fell 80.2 points to close at 2,187.4, its lowest biggest one-day fall in four years.

Philippine share prices plunged 2.3 percent on selling triggered by a slump on Wall Street. The Philippine Stock Exchange index fell 66.14 points to 2,810.65.

Malaysian share prices plunged 3.4 percent by the midday break. The Kuala Lumpur Stock Exchange's 100-share weighted composite index tumbled 37.65 points to 1,078.45, erasing gains made last week.

Share prices plunged 1.8 percent on the Korea Stock Exchange as investors withdrew to the sidelines amid delays in government measures to boost the bourse, dealers said. The composite price index closed 15.37 points lower at 848.26.

The Stock Exchange of Thailand (SET) index slumped 48.76 points to close the morning session at 1,260.21 points.