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Asian markets drop, Shanghai down 7.7%

Asian markets drop, Shanghai down 7.7%
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First Published: Wed, Jun 11 2008. 12 10 AM IST
Updated: Wed, Jun 11 2008. 12 10 AM IST
Shanghai, China: Asian stock markets sank on Tuesday, with China’s most-watched index plunging 7.7% as investors reacted to the country’s latest move to tighten credit and restrain inflation.
Across the region, a combination of negative news left investors staggering.
Wall Street’s mixed session overnight was little comfort, particularly following its heavy losses last week. The financial sector added to fears about the US economy, a vital export market, after Lehman Brothers Holdings Inc. posted an unexpectedly large quarterly loss of $2.8 billion (Rs12,012 crore).
Chinese, Hong Kong and Australia financial markets were closed on Monday for national holidays, so Tuesday was the earliest chance for investors to react to Wall Street’s Friday sell-off, which had dragged down other regional markets the previous day.
The benchmark Shanghai Composite Index fell 257.34 points to 3,072.33, its biggest one-day fall since it dropped 8.3% on 4 June 2007. The Hang Seng in Hong Kong dropped 4.2% to 23,375.52, while Australia’s benchmark index fell 2.8% to close at 5,437.5.
Investors in mainland China dumped bank and property shares after a weekend decision by the country’s central bank to require banks to keep more deposits on hand. The measure was aimed at easing inflation that is at 12-year highs without unduly slowing the dynamic economic growth needed to create jobs.
In Tokyo, the Nikkei 225 closed down 1.1% at 14,021.17 after dropping 2.1% Monday.
Taiwan’s benchmark index fell 2.5%, and the Philippines market tumbled 3.4%.
Jeremiah Marquez in Hong Kong contributed to this story.
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First Published: Wed, Jun 11 2008. 12 10 AM IST