Asian stocks plummet on fears of more credit lossesMarch 13th, 2008 - 7:26 pm ICT by admin
Tokyo, March 13 (DPA) Asian stocks plummeted Thursday on worries about the dollar’s weakness, rising credit-related losses and record oil prices. The biggest losses were seen in India, whose losses were exceeding 5 per cent ahead of the markets’ close, and in Hong Kong, where the Hang Seng Index fell 4.79 per cent to 22,301.64 as a flu outbreak that prompted the closure of primary schools and kindergartens added to investor pessimism.
Stocks in Tokyo hit their lowest levels since August 2005 as the dollar fell below 100 yen for the first time in more than 12 years, hitting export-oriented shares.
Toyota Motor Corp, nearly 60 per cent of whose sales come from abroad, was among the day’s big losers because a stronger yen lowers the value of Japanese firms’ overseas revenues.
The Nikkei 225 Stock Average tumbled 3.33 percent to close at 12,433.44 while the broader Topix index of all first-section issues declined 3.13 percent to 1,215.87.
A reason for the dollar’s fall was the announcement by a Carlyle Group fund that it was unable to reach an agreement to reschedule its overdue debt and it expected lenders to “promptly” seize more than $16.6 billion of its assets, which would send it into insolvency.
The news fuelled speculation that there would be more such announcements in the future and continuing credit-market losses would send the economy in the United States, Asia’s biggest export market, into recession.
Analysts said a further contribution to the declines was Wall Street’s losses overnight after US-based banks said the Federal Reserve’s injection of another $200 billion into the financial system might not free up credit.
“It doesn’t fix the US’ economic woes by creating new jobs and generating income for households to spend,” agreed Kevin Scully, managing director of NetResearch Asia in Singapore.
Banks and exporters were among the biggest decliners around the region Thursday.
Other Asian markets seeing big losses were Singapore’s Straits Times Index with a 3.85-percent plunge to 2,805.55, Taiwan’s Taiex index with a 2.66-percent decline to 8,210.99 and South Korea’s Kospi at a 2.6-percent fall to 1,615.62.
Australia’s ASX 200 Index fell 2.32 cent to 5,135.9 on expectations of a 13th-straight interest rate increase after unemployment there fell to a 33-year low of 4 per cent in February.
In mainland China, investors continued to worry about possible interest rate hikes and government measures to control record inflation, sending the Shanghai Composite Index down 2.43 percent to 3,971.26 and the Shenzhen Composite Index down 3.3 cent to 1,248.19.
South-East Asian indices also declined, the Jakarta Composite Index by 4.52 percent, the Kuala Lumpur Composite Index by 2.53 percent and the Stock Exchange of Thailand Index by 1.53 percent.
Tags: asian stocks, big losers, broader topix index, carlyle group, credit losses, economic woes, flu outbreak, group fund, hang seng index, japanese firms, kevin scully, market losses, netresearch asia, nikkei 225, overdue debt, record oil prices, singapore banks, stock average, tokyo march, toyota motor corp