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Economic fears push Asian stocks down

Economic fears push Asian stocks down
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First Published: Fri, Sep 05 2008. 12 15 AM IST
Updated: Fri, Sep 05 2008. 12 15 AM IST
Hong Kong: Asian shares fell to new two-year lows on Thursday as further signs of a slowing global economy hit export-dependent sectors such as technology. Concerns that earlier this year had centred in the US are now expanding to other regions, contributing to the rebound of the dollar against other currencies.
Shifting expectations for global interest rates are playing a role as well. Investors are betting the European Central Bank will cut rates, in contrast to the US Federal Reserve, which is set to tighten monetary policy over 2009. These factors have also hit oil prices, with crude dipping towards $109 (Rs4,850) a barrel.
“Economic conditions are worsening in countries other than those of the dollar and the degree of their deterioration is becoming clearer,” said Mitsuru Sahara, senior manager of foreign exchange sales for Bank of Tokyo-Mitsubishi UFJ.
MSCI index of Asian stocks outside Japan fell at one point to its lowest since November 2006, and was down more than 1% in late Asian trade. Concerns over global economic growth were reinforced after euro zone data on Wednesday showed falling investment and private consumption led to the first ever quarterly contraction from April to June. The outlook in the US remains weak, with the Fed’s latest Beige book report showing economic activity was slow in August.
Asia is struggling as well. Tokyo’s benchmark Nikkei index fell 1%, Taiwan 2.6%, Singapore down 3%, and Australia 1.6% lower. Hong Kong and India lost 1% each. Main stock indexes in Korea and China were flat.
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First Published: Fri, Sep 05 2008. 12 15 AM IST