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Asia, Europe markets sink after Wall Street plunge
2008-09-05
TOKYO - Asian stock markets plunged Friday in the wake of a sell-off on Wall Street amid mounting concerns about a slumping U.S. economy and its impact on global growth. European shares also opened lower. Disappointing reports on U.S. retail sales and jobless claims overnight undercut hopes for a late-year recovery in the world's biggest economy, a critical export market. No Asian market was spared from the carnage, which began as soon as trading opened and continued throughout the day. In Japan, the benchmark Nikkei 225 index sank 2.75 percent to 12,212.23. Hong Kong's Hang Seng index tumbled 2.24 percent to 19,933.28, dropping below 20,000 for the first time in more than a year. Markets in India, Australia and Singapore also fell sharply. China's Shanghai index slid 3.3 percent to the lowest in 21 months. Mark Matthews, chief Asia strategist at Merrill Lynch, said emerging markets in Asia and other regions have been hit hard lately as investors withdrew funds and faith in the global economy withered. "People want to be confidant that the economy of the world can get better, and right now they don't have that confidence," Matthews said. "They think the global economy is still going to get worse." In morning trading in Europe, Britain's FTSE 100 was down 1.73 percent to 5,269.10, Germany's DAX fell 1.72 percent to 6,171.28, and France's CAC 40 lost 1.62 percent to 4,234.26. Pessimism permeated markets as they nervously awaited the August U.S. employment report later Friday. News Thursday from major U.S. retailers that shoppers curtailed their spending last month helped send the Dow Jones industrial average down 344.65 points, or 2.99 percent, to 11,188.23. "It was ugly in the States; many are still taking their leads from the U.S.," said Lorraine Tan, director at Standard & Poor's equity research in Singapore. "And there's just an overall concern with global growth." Investors bracing for weak U.S. jobs figures fueled selling in Japan, said Masaru Ohnishi, equity strategist at JP Morgan Securities in Tokyo. But because markets have already fallen so sharply, they are "likely to rebound if results are good," he said. A drop in the dollar against the yen overnight contributed to the malaise, pummeling major Japanese exporters. A weaker dollar reduces the value of overseas profits when repatriated to Japan. The dollar fell to 106.87 yen Friday afternoon in Asia; on Thursday in Tokyo it was trading above 108 yen. The euro was trading at $1.4242 from $1.4258. Toyota Motor Corp. retreated 2.5 percent to 4,750 yen, Nissan Motor Co. tumbled 3.6 percent to 800 yen, and Mazda Motor lost 6.9 percent to 527 yen. Sony Corp. dived 4.2 percent to 3,880 yen after the consumer electronics maker announced Thursday a worldwide reacall of 440,000 Vaio laptop computers due to a wiring flaw that could cause overheating. In Hong Kong, investors sent Chinese commodity producers spiraling, with Angang Steel losing 7.5 percent to HK$8.56 and and Aluminum Corp. of China, or Chalco, down 3.2 percent to HK$6.19. "Trades are just being unwound in commodities and infrastructure," said Benjamin Collett, head of hedge fund sales trading Daiwa Securities SMBC Co. "These are crowded theme stocks that are just getting killed." Property stocks were down especially big after Goldman Sachs issued a pessimistic outlook for the sector. Hong Kong's leading property firm Sun Hung Kai tanked more than 6 percent, while Cheung Kong plunged 5.7 percent. Telecoms also took a beating. Heavyweight China Mobile, the world's largest mobile phone company by subscribers, shed 2.4 percent to HK$82. In Shanghai, selling was heavy across the board, with the key index falling 3.3 percent to 2,202.45. PetroChina, the Shanghai index's biggest traded share, sank 4.2 percent. Refiners, property firms and banks were also among the heaviest losers. Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, lost 2.8 percent to 4.51 yuan. China Construction Bank Ltd. fell 2.95 percent to 4.93 yuan. In India, the Sensex fell 2.8 percent to 14,483.83. ___ AP reporter Jeremiah Marquez contributed to this report from Hong Kong.
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