Mar 3, 2008 7:15 am US/Central
Asian Markets Tumble On U.S. Economy Worries
SEOUL, South Korea (AP) ―
Most Asian markets tumbled Monday as investors reacted nervously to a steep decline on Wall Street Friday after disappointing economic and corporate news renewed worries about a U.S. recession.
Japan's benchmark Nikkei 225 index plunged 4.5 percent to close at 12,992.18. Markets in Hong Kong, South Korea, India and Australia also fell sharply. But shares in mainland China advanced.
Investors across much of the region dumped stocks after poor earnings Friday from American International Group Inc. and Dell Inc. and weaker-than-expected results on the Chicago purchasing managers index, which painted a dreary picture of the manufacturing sector. The Dow Jones industrial average fell 315.79, or 2.51 percent, to 12,266.39.
Asian investors worry that a slowdown in the American economy will weaken demand for exports and drag on global growth.
"It's all due to fears of a recession in the U.S.," said CommSec chief equities economist Craig James in Sydney, Australia.
U.S. stock index futures were down, suggesting Wall Street was poised for another decline Monday.
The dollar's drop to a three-year low against the yen also weighed on sentiment in Tokyo as dollar weakness erodes overseas earnings at Japan's exporters. The dollar fell as low as 102.59 yen, its lowest in more than three years and down from 103.96 yen late Friday in New York.
Asian markets, which have fallen much of the year so far, had staged a modest recovery through the middle of last week, with Tokyo's Nikkei climbing to a seven-week high last Wednesday.
But pessimism returned Monday, sending Hong Kong's Hang Seng index sliding 3.1 percent to close at 23,584.97. India's Sensex was down 3.4 percent in afternoon trading at 16,985.28.
U.S. economic growth slowed to a 0.6 percent pace in the fourth quarter and some analysts believe the economy is already shrinking.
"The biggest economy in the world is mired in recession and everybody suffers," said Francis Lun, a general manager at Fulbright Securities in Hong Kong, summing up regional feelings.
Testifying before Congress last week, Fed Chairman Ben Bernanke signaled that the central bank sees weak growth as the main threat and is prepared to further cut interest rates.
Hours before Wall Street resumed trading, Dow index futures were down 102 points, or 0.8 percent, to 12,204, while Standard & Poor's 500 futures contracts were down 8.1 points, or 0.6 percent, to 1,323.2.
Global investors are bracing for two key U.S. economic reports due this week: Monday's release of the Institute for Supply Management manufacturing survey report and Friday's jobs numbers. On average, economists are forecasting a slight increase in non-farm payrolls, but many believe they will decline for a second straight month.
In other markets in the region, the Korea Composite Stock Price Index fell 2.3 percent to 1,671.73, while Australia's benchmark S&P/ASX200 index slid 3 percent to 5,405.8.
Markets in China, however, bucked the trend. The benchmark Shanghai Composite Index rose 2.1 percent to close at 4,438.27 with shares buoyed by gains in food and beverage companies and in airlines.
(© 2008 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
