Asia stocks continue at 5-year low

Asia stocks continue at 5-year low
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First Published: Fri, Nov 21 2008. 11 16 AM IST
Updated: Fri, Nov 21 2008. 11 16 AM IST
Hong Kong: Waves of selling in world stock markets crashed into Asia on Friday, with gains from the region’s 5-year bull run now erased as a global recession tightened its grip, and investors sought refuge in government bonds and cash.
US stocks were at the lowest in more than a decade and oil prices fell to 3-1/2-year lows, trading below $50 a barrel, as commodity prices slumped on expectations of reduced demand as economies from the euro zone to Taiwan contract.
The fate of US corporate titans like General Motors, Ford Motor Company and Citigroup was uncertain, adding to a general mood of anxiety.
Citigroup, not long ago the world’s most valuable financial firm, was reportedly considering selling itself.
Democratic congressional leaders demanded executives at the Big Three automakers come up with a detailed business survival plan in exchange for their support of up to $25 billion in loans.
Investors priced in a 1-in-3 chance that the US Federal Reserve would cut its benchmark interest rate to 0.25% from 1% on or before its last policy meeting of the year on 16 December.
A growing number of Fed officials are talking about an unprecedented monetary expansion, with more economists expecting the base rate to hit zero.
Japan’s Nikkei share average dropped 2.2%, extending its weekly decline to around 12%.
Stocks in the Asia-Pacific region excluding Japan were down 2%, according to an MSCI index, after earlier slipping to their lowest since October 2003 when global markets were just beginning to recover from the bursting of the dotcom bubble.
The MSCI All-Country World Index fell 0.5%, plumbing the lowest levels since April 2003, having now fallen 53% this year.
Hong Kong’s Hang Seng index shed 3%, with widespread weakness most acute in the financial, real estate and commodity-related sectors.
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First Published: Fri, Nov 21 2008. 11 16 AM IST
More Topics: Markets | Global | Asia | Stock | Financial Crisis |