Currency woes drive down stocks across Asia

Currency woes drive down stocks across Asia

SINGAPORE (Agencies): Stock markets across Asia ended lower yesterday, dragged down by Friday's staggering assault on Wall Street and continued volatility in local currency markets.

Trading was thin and volatile across Asia yesterday though most markets recovered from the day's lows.

In Tokyo, the Nikkei 225-share index fell 391.74 points, or 2.03 percent, at midday to 18,934.29 before recovering slightly. It ended off 284.93 points, or 1.47 percent, at 19,041.10.

The high-technology sector, which had rallied recently, was particularly hard-hit.

"The Japanese market is currently vulnerable to negative news because of the shaky recovery in the domestic economy," said Keiko Kondo, a strategist at Merrill Lynch Japan Inc.

Hong Kong, markets were closed for a public holiday.

In Taiwan, markets were also closed due to a typhoon.

New York's performance overnight would set the tone for the markets on Tuesday, but the currency factor would continue to put pressure on Southeast Asian markets over the near term, analysts said.

"Because the U.S. is such a big part of the world economy, everyone will be waiting to see whether they have a rally," said Deutsche Morgan Grenfell Sydney institutional head Marlon Freeman.

The Dow's fall of 247.37 points, or 3.11 percent, on Friday to a close of 7,694.66 was the largest point loss in the market's history since the "Black Monday" crash of October 1987.

Philippine stocks also fell sharply yesterday. The composite index dropped 4.12 percent before closing off 80.26 points, or 3.28 percent, at 2,368.67, a 21-month low.

The Dow's drop triggered an early selloff which brought the market below the 2,400 support level, but subsequent losses came as the peso fell to a record low of 30 to the dollar.

In Malaysia, where the ringgit fell to its lowest level last week since it was officially floated in 1973, the Dow's fall triggered heavy selling in stocks. The market closed down 29.73 points at 880.45.

"People are expecting the ringgit to fall further. That's what's dampening the market," one dealer in Kuala Lumpur said.

Thai stocks ended down 18.91 points, or 3.03 percent, to 604.34, while Singapore's Straits Times Index ended down 34.95 points, or 1.79 percent, at 1,918.85.

Korean stocks were hurt by a drop in the value of the won against the dollar and by financial troubles at another large corporation, textile marker Han Joo.

The composite index lost 1.12 points to close at 747.29.

Australian stocks were off the day's lows. The All Ordinaries Index was down 47.7 points, or 1.79 percent at 2,618.5 after hitting a low of 2,589.8. New Zealand shares ended down 24.81 points, or 0.99 percent, at 2,470.82.

Shares on major European bourses dived yesterday in response to Friday's massive slide on Wall Street, but analysts dismissed fears of a major bloodbath, describing the losses as a natural downward correction from overvalued stocks.

The worst affected bourse was Frankfurt, where the DAX index of 30 leading shares plunged 153.77 points, or 3.7 percent, to 3,999.49 points. This followed a 2.8 percent drop on Friday.

In London, the FT-SE 100 index of leading shares dropped 86.5 points, or 1.77 percent, to 4,779.3 at the start of trading. But the Footsie later clawed back some ground, to show a loss of 24 points at 4,841.8.

The Paris, Milan and Madrid stock markets, which were all closed on Friday due to national holidays, also suffered sharp corrections.

In Paris, the CAC-40 index of leading shares plunged 3.37 percent to 2,823.41.

In Milan, the index of major shares lost 1.96 percent, after plunging 2.33 percent in opening trade. And in Madrid, share prices dropped 2.47 percent.

In Amsterdam, which fell four percent on Friday, the AEX index was down 1.66 percent.

The weakness of the German currency had driven European share prices higher in recent months because it benefited exporters in continental Europe, helping to lift sluggish growth.

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