 MSNBC.com |
Asian markets fall sharply at opening
TOKYO - The historic carnage on Wall Street spread to Asia Tuesday, with stocks across the region plunging after Congress rejected a rescue plan that investors had hoped would bolster volatile financial markets.
All major stock markets in the region tumbled sharply, succumbing to heightened fears of a broader global credit crisis.
Japan's benchmark Nikkei 225 index shed more than 544 points, or 4.6 percent, to 11,199.07 after losing 1.3 percent Monday.
Key indices in Australia and New Zealand were both down about 4 percent, Seoul's Kospi lost 3.5 percent, and Hong Kong's Hang Seng index declined 5.5 percent.
The weighted price index of the Taiwan Stock market, which was closed Monday due to a typhoon, fell 6.1 percent, even after Taiwanese Vice Premier Paul Chiu urged investors to have confidence in the island's export-driven economy and its financial markets.
The selling in Asia came after world stock markets tumbled Monday amid a flurry of government bank rescues in Europe that had investors on edge even before the House voted to reject the Bush administration's rescue plan.
The House of Representatives on Monday defeated a $700 billion emergency bailout package for the U.S. financial system, shocking capital and stock markets around the world. The Dow Jones industrial average closed down 777 points, its biggest single-day fall, topping the 684 points it lost on the first day of trading after the Sept. 11, 2001, terrorist attacks.
The downturn sapped the dollar overnight. The greenback was trading at 103.90 yen Tuesday morning in Asia from above 106 yen a day earlier, adding further pressure on major exporters.
Latin American markets were still open when news that lawmakers on Capitol Hill had rejected the bailout sent investors running for the exits from Mexico City to Buenos Aires.
Stocks in Europe had earlier ended lower, although less dramatically, as market players fretted about the health of the world's financial system, even with a U.S. bailout.
In Latin America, Brazil's main index took the hardest hit, shedding 9.4 percent to end at 46,028, after falling almost 14 percent during the session.
Buenos Aires' Merval index, meanwhile, dropped 8.7 percent to close at 1,545, while Mexico's IPC index slipped 6.4 percent to close at 23,956. Chile's Ipsa index closed down 5.5 percent to 2,631.
The Toronto Stock Exchange, meanwhile, closed down 840 points, or 7 percent to 11,285. It had been down 955 points Monday in the initial reaction to the vote in the House.
Even before the vote in Washington, markets in Europe and Asia were bleak, as a flurry of developments around the world appeared to confirm fears that the global financial contagion is likely to spread further before any recovery.
"There's an increasing realization that the cleanup and the mending of all that's gone wrong is going to take an extended period to work through, and we're going to see an extended recovery period," said Jamie Spiteri, senior dealer at Shaw Stockbroking in Sydney.
The London Stock Exchange FTSE 100 fell 5.3 percent to 4,819, while Germany's DAX dropped 4.2 percent to 5,807 and France's CAC 40 fell 5.0 percent to 3,953.
In Dublin, the Irish Stock Exchange plummeted 13 percent to 3,292 points.
The markets were responding in part to news that Dutch-Belgian banking giant Fortis NV was partially nationalized with a 11.2 billion euros ($16.4 billion) rescue from the governments of Belgium, the Netherlands and Luxembourg, after investor confidence in the bank disappeared last week.
In other activity across Europe, the British government nationalized mortgage lender Bradford & Bingley, taking over the bank's 50 billion pound ($91 billion) mortgage and loan books. In a similar move, the Icelandic government bought a 75 percent stake in Glitnir, the country's third largest bank, for 600 million euros ($878 million) to ensure broader market stability after it suffered liquidity issues.
In Germany, the country's second biggest commercial property lender, Hypo Real Estate Holding AG, said it had secured a multibillion euro line of credit from several banks.
URL: http://www.msnbc.msn.com/id/26949764/
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