Asian governments move to halt stock market slide
Governments in Asia are pumping in big funds to fight off the credit crunch emerging out of global crisis. Governments are also cutting down cash reserve and interest rate to make more liquidity. Hong is cutting its key interest rate by 100 basis points effective Thursday. Australia made a similar move on Tuesday.
British Prime Minister Gordon Brown is set to announce a rescue package for its ailing banking industry before markets will open in UK. His move has come after the Royal Bank of Scotland shares tumbled 40 per cent on Tuesday amid a global sell-off by panicked investors.
Japan and Australia pumped US$15 billion into money markets Wednesday and Hong Kong slashed interest rates, as governments tried to ease the credit crunch pummelling world stock markets.
But like other such moves in recent days, the new measures failed to bring immediate relief as the global sell-off continued in the face of the worst financial crisis since the Great Depression.
"These sorts of measures aren't working anymore," said Hiroichi Nishi, a broker at Nikko Cordial in Japan. "It's like you're trying to pump blood into a heart with clogged arteries."
Japanese stocks were down more than five per cent, Hong Kong opened down 5.1 per cent and Australia was off 4.1 per cent, following a rout on Wall Street overnight as the Dow shed 5.1 per cent to close at a five-year low.
The Bank of Japan injected 1.5 trillion yen (US$14.8 billion) into the money markets, its 16th straight day of intervention, while Australia's central bank pumped in A$1.21 billion (US$856 million).