Asian stocks struggle amid recession worries

by Sanjay Jha | October 26, 2008 at 08:06 pm

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Led by the Tokyo stock exchange, Asian shares fell sharply in Monday's trading. Investors are bracing for more volatility after last week's massive sell-off. The Nikkei index today hit its lowest intraday level since 1982.

Panic has gripped the investors and they fear fresh moves expected from central banks this week will not be enough to stave off a deep global recession.

Asian stock markets buckled again Monday, with Japan's Nikkei index briefly hitting a 26-year low on fears emergency steps by world governments will be too late to prevent a global recession.

Investors were bracing for another tough week for markets as the worldwide financial crisis drags on, and the International Monetary Fund (IMF) moved to bail out Ukraine and Hungary which have suffered badly in the turmoil.

In Japan, Prime Minister Taro Aso announced fresh measures to support the ailing stock market including boosting a government fund to pump capital into banks if needed.

As policymakers continued their efforts to contain the turbulence, South Korea's central bank cut its key interest rate by 75 basis points, its largest reduction yet.

The fresh sell-off began in Japan, where the Nikkei briefly fell to a level last seen in 1982 before the economic bubble era.

The index later rebounded to show a gain of 0.4 per cent by lunch on talk of possible intervention by the Japanese authorities to try to rein in the soaring yen.

Elsewhere Taipei lost 6.0 per cent and Shanghai shed 2.3 per cent. Sydney was down 1.35 per cent by midday while Hong Kong opened 2.0 per cent lower.

South Korea's KOSPI index was down 0.58 per cent despite the rate cut.

Trading was halted on the Philippine Stock Exchange after shares plunged 10 per cent, triggering an automatic cool-off period.

Financial markets in Singapore and Malaysia are closed due to public holiday and will resume trading on Tuesday.

UPDATE:

Tokyo, Oct 27 (DPA) Asian markets plummeted to new lows Monday, with Japan’s key Nikkei index leading the plunge, as investors across the region stepped up panic-selling on concerns that tumbling share values would drag economies into recession.Stocks in Tokyo nosedived, as the benchmark Nikkei 225 tumbled 486.18 points, or 6.36 percent, to close at 7,162.9, the lowest level in 26 years.

The market crisis has shaved off half the value off the Nikkei this year.

The broader Topix index of all first-section issues also lost 59.65 points, or 7.4 percent, to 746.46.

The Bank of Japan injected 600 billion yen ($6.37 billion) into the money markets Monday to ease a credit crunch as stocks prices plunged.

Finance Minister Shoichi Nakagawa said he was “very much worried” about the fall in stock prices and announced a government plan to take emergency measures to stabilize stocks, while the yen hit a 13-year high against the dollar, crushing the overseas earnings prospects of Japanese exporters.

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Other Asian markets were similarly shaken, with South Korea’s Kospi index bucking the trend, trading up 0.82 percent at 946.45, as the country’s central bank announced a record rate cut of 0.75 percentage points to 4.25 percent.

Hong Kong’s Hang Seng Index plummeted more than four per cent Monday morning, leaving the blue-chip index hovering just above 12,000.

The index lost 532.11 points, or 4.22 percent, closing for lunch at 12,086.27.

The sell-off came after share prices initially crept up slightly in the opening minutes of trading before falling sharply back as more pessimism clouded the market amid fears of a global recession.

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Asian stocks struggle amid recession worries

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