Shares prices fall worldwide
JAKARTA (JP): Shares prices on the Jakarta Stock Exchange (JSX) plunged sharply by 8.59 percent or 42.12 points to a new low of 447.99 points yesterday as billions of dollars were wiped off stock exchanges worldwide.
The panic selling by most investors was triggered by the overnight plunge in Wall Street on Monday and another crash of the Hong Kong Stock Exchange yesterday, brokers said.
"I think Tuesday's fall in the global market is a reoccurrence of the Black October crash a decade ago," Edi Widjoyo of Mashil Jaya Securities said yesterday.
Most stock brokers in Jakarta said stocks across the board became sell-off targets of foreign and local fund managers forcing the local main price gauge to fall steeply.
"Most investors were in a panic-selling mode in response to the global stock market crash," David P. O'Neil, vice president of research at Lippo Securities said.
David Chang, head of research at Trimegah Securities, said the fall of regional stock markets several months ago had perforated the global market.
He said stock markets in Southeast Asian countries were badly hit as they bore the brunt of the currency crisis in the region, triggered by the devaluation of the Thai baht in early July this year.
"Now the Asian virus has spread to the world," Chang said yesterday, referring to the fall of global stock markets.
"The general feeling is that we cannot do much. We just lie low and find out what the corporate problems are and try to cope with those problems," Chang added.
Most securities analysts contacted by The Jakarta Post said that it was a really difficult time for the Jakarta stock market. "It's very difficult to estimate when the Jakarta market will recover," O'Neil said.
Reuters reported Asian markets dropped after the Dow Jones industrial average lost 554.26 points, or 7.2 percent, to end at 7,161.15 overnight in New York.
In Hong Kong, where the Hang Seng index saw its largest ever drop -- 1,438.31 points, or 13.78 percent -- Chief Executive Tung Chee-hwa held his first crisis cabinet meeting since the territory reverted to Chinese rule in July.
He later told reporters his government remained optimistic about the Hong Kong stock market and that currency speculators who triggered recent record market falls had retreated.
"In fact on the currency side, the speculators who came to speculate against our currency have basically left us, so from now the currency can be stabilized," Tung said.
In Tokyo, Finance Minister Hiroshi Mitsuzuka told reporters there was no doubt Japan's economic fundamentals were sound.
Chief cabinet spokesman Kanezo Muraoka was equally blunt: "It is not appropriate for the government to intervene in the stock market," he told reporters.
In a warning to investors, Muraoka added: "We would like investors throughout the world to watch the stock markets calmly and to invest cautiously."
Tokyo stocks fell 725.67 points, or 4.26, percent to close at 16,312.69, the smallest decline of major markets.
In Taipei, Finance Minister Paul Chiu said Taiwan's economy was sound and the state would support the markets, although only when necessary.
Taiwan's stock market closed down 5.91 percent at 7,210.90. The Taiwan dollar closed at a 10-year low of T$30.800 against Monday's T$30.510 finish.
In Canberra, Acting Prime Minister Tim Fischer told parliament: "The truth of the matter is that it is a very serious situation."
"We have in fact taken a number of budgetary steps which will ensure that Australia will weather the storm a whole lot better than would have been the case had (the) Labor (Party) continued in power and created further debt and budget deficits," he said.
The Australian share market closed down 7.2 percent at 2,299.20 points.
In Bangkok, where Asia's financial crisis started earlier this year, Thai Finance Minister Kosit Panpiemras said his government was watching the situation closely.
The Thai stock index was down 29.60 points, or 6.03 percent, in late afternoon, and Kosit blamed its fall on the turmoil on Wall Street's plunge.
In Kuala Lumpur, the benchmark Composite Index of 100 key stocks was down at a four-year low of 46.07 points or 6.64 percent to 647.32, slightly above its session low of 646.21. The ringgit touched a new low against the dollar earlier.
"People are hurting a lot today, it's not very nice," commented an equity analyst with a foreign firm.
In Singapore, the key share index ended at a 58-month low after the market was besieged with heavy fund redemptions.
The key Straits Times Industrials Index (STII) ended near intraday lows at 1,497.03, down 7.59 percent, or 122.87 points.
It slumped to a new year low of 1,486.74, last seen in December 1992, before paring losses on short covering.
Reuters reported from New York last night that the Dow Jones industrial average lost more than 100 points in early trading yesterday as the global stock market sell-off continued.
At 9:49 a.m. EST (1449 GMT), the Dow was off 106.09 points at 7,055.06, adding to the previous day's loss of 554 points, the biggest point loss ever.
Stocks fell sharply in Asia overnight and were sharply lower in Europe. The Nasdaq index of smaller and high-technology stocks tumbled 59.88 or 3.9 percent to 1,475.21. (aly)
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