Asian markets plunge on fears of US recession

Asian markets plunge on fears of US recession
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First Published: Fri, Jan 18 2008. 11 16 AM IST
Updated: Fri, Jan 18 2008. 11 16 AM IST
AP
Tokyo: Asian markets plunged again Friday amid growing fears that the American economy could be headed for a recession after weak US manufacturing figures and an overnight drop on Wall Street.
In Tokyo, the region’s biggest market, the benchmark Nikkei 225 stock index lost 387.67 points, or 2.8%, to end morning trading at 13,395.78.
Hong Kong’s blue-chip Hang Seng index plummeted 3.7% at the opening, but then trimmed losses as investors snapped up shares that have fallen sharply since the start of the year. By midday, it was down 400 points, or 1.6%, at 24,714.
Wall Street’s drop and worries that a contraction in the US economy, a key export market, will hurt corporate profits prompted investors to sell off stocks, said Yasunari Ueno, analyst at Mizuho Securities Co.
“That sums up the global reaction for now,” he said.
The key index in the Philippines fell 2.5%, while Singapore’s market was down 1.6%.
Investors reacted nervously after a US government report showed a sharp and unexpected decline in manufacturing activity and figures that showed housing starts plunged to their weakest pace in more than 16 years. That helped send the Dow Jones industrial average sliding 2.5% yesterday to 12,159.21, its lowest level since March 2007.
Investors around the world are jittery about the full extent of the sub-prime mortgage crisis in the US, which has led to a credit crunch and billions of dollars of losses at major American investment banks Citigroup and Merrill Lynch & Co. due to writedowns of bad assets.
Recent signs of slower US consumption has added to concerns that the American economy might contract, weakening demand for Asian electronics, autos, clothing and other exports.
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First Published: Fri, Jan 18 2008. 11 16 AM IST
More Topics: Asian markets | Nikkei | Dow Jones | Nasdaq | Hang Seng |