Asian bourses finish lower on US recession fears

March 10th, 2008 - 9:25 pm ICT by admin  

Tokyo, March 10 (DPA) Asian stock markets retreated Monday on renewed concerns about a possible US recession and its likely impact on companies dependent on cross-Pacific exports. The region’s most dramatic fall came in Malaysia, where stocks fell nearly 10 per cent due to investor uncertainty after the ruling National Front coalition was returned to power but denied a two-thirds majority for the first time since 1969.

The Kuala Lumpur Composite Index fell 123.11 points to close at 1,173.22 after trading was halted for an hour when the losses had mounted to 10.03 per cent, triggering a shutdown in a circuit-breaker system implemented to protect the market.

The market reopened at 4 pm (0800 GMT) and continued to dip but regained some ground, closing 9.5 per cent down.

“There was panic selling, and foreign buyers were dumping everything in response to the (election) news,” said a broker at a local investment institution.

Meanwhile, Japan’s key Nikkei index hit its lowest level since September 2005 due to fears over a possible US recession.

The Nikkei 225 Stock Average dropped 250.67 points, or 1.96 per cent, to close at 12,532.13.

The broader Topix index of all first-section issues was also down 23.38 points, or 1.87 per cent, to end at 1,224.39.

Shares also fell sharply on the Seoul stock exchange, with the benchmark Kospi index losing 38.80 points, or 2.3 per cent, to close at 1,625.17.

The main index of the technology-heavy Kosdaq market plunged 21.15 points to 622.60.

Shares on China’s two main stock markets fell by nearly 4 per cent as investors anticipated consumer price inflation could trigger more tightening measures by the government.

The key Shanghai Composite Index, which covers shares traded in both local and foreign currency, lost 154.22 points, or 3.59 per cent, to close at 4,146.30.

The smaller Shenzhen Composite Index also plunged 3.71 per cent, on the same day that the government announced that the producer price index, which tracks factory prices, rose by 6.6 per cent in February from the same month a year ago.

The government was expected to announce February consumer price inflation on Tuesday, and many analysts said they believe that another record, following a 7.1-per-cent year-on-year jump in January, could force it to take more action to tighten credit and control prices of key goods.

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