Singapore: Asian stocks slumped early Monday amid a muddled US economic picture and fears that Europe will not be able to come up with a plan to prevent Greece from defaulting on its debts.
Oil prices fell to below $87 a barrel Monday in Asia as investor concerns about Europe’s debt crisis fueled a stronger US dollar.
Hong Kong’s Hang Seng index plunged 2.4% in early trading to 18,981.14. South Korea’s Kospi index fell 0.9% at 1,823.67. Australia’s S&P ASX 200 fell 1.8% to 4,075.60.
Benchmarks in Singapore, Taiwan, Indonesia and New Zealand were also lower. Japanese financial markets were closed Monday for a national holiday. Confusion about the US economy is one reason the Dow Jones industrial average is the most volatile it’s been since the peak of the financial crisis in 2008.
The Dow rose or fell by more than 100 points 16 times in August, a rate that comes to two out of every three trading days. It swung by more than 400 points for four consecutive days in the middle of the month — a first in its 115-year history. Since hitting a high for the year in April, the Dow has fallen nearly 11%.
The US economy barely grew during the first six months of the year. Consumer confidence fell to its lowest level since April 2009, when the economy was still in a recession. And there was no job growth in August.
At the same time, the Federal Reserve’s latest survey found that the economy grew in all 12 of its regions from mid-July to the end of August. Sales of big-ticket items like cars increased from the same time last year.
In Europe, meanwhile, finance ministers meeting Friday in Poland said they would push back a decision on whether Greece should get its next payment from last year’s $151 billion bailout package until next month.
Greece needs the payment to avoid defaulting on its debt, an event that would undermine the global economic recovery and hurt banks that hold Greek debt. Benchmark oil for October delivery was down $1.21 at $86.75 in electronic trading on the New York Mercantile Exchange.
Crude dropped $1.44 to settle at $87.96 on Friday. In London, Brent crude for November delivery was down 50 cents at $111.72 on the ICE Futures exchange. In currencies, the euro fell to $1.3664 from $1.3791 late Friday in New York. The dollar was steady at ¥76.87.