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World Stocks Fall Sharply after Wall Street Tumble | ASHARQ AL-AWSAT English Archive 2005 -2017
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HONG KONG, (AP) – World stock markets dropped sharply Friday, with benchmarks in Japan and Hong Kong sliding about 2 percent or more, after gnawing economic fears sent Wall Street tumbling to its lowest close in more than six years.

Investors in Asia and Europe found few reasons to wade into the market after the Dow Jones breached the levels it touched in November when global equities went into a tailspin at the height of last year’s financial crisis.

The Dow’s miserable finish — its worst since Oct. 9, 2002, when the last bear market hit bottom — deepened concerns that the markets’ downturn is far from over. It also provided a clear sign that investors don’t see a quick end to the worst global slowdown in decades despite the unprecedented intervention in economies and markets by governments around the world.

“People just don’t know where the bottom is,” said Desmond Tjiang, Hong Kong-based chief investment officer at Fortis Investment Management, which manages $3 billion in Asian equities.

“The macro indicators are still deteriorating, the companies aren’t giving any guidance and the governments don’t know what they’re going to do,” Tjiang said. “Basically nobody has any visibility or knows what’s going to happen.”

In Asia, Japan’s Nikkei 225 stock average lost 141.27 points, or 1.9 percent, to 7,416.38, and the broader Topix index hurtled to its worst finish in 25 years.

Hong Kong’s Hang Seng dropped 324.59, or 2.5 percent, to 12,699.17. In South Korea, the Kospi shed 3.7 percent to 1,065.80 as the country’s currency, the won, lost more ground against the dollar. A weaker won can lead to higher costs for domestic firms.

Stock measures in India, Taiwan and Singapore sank about 2 percent, while those in Australia and Thailand were down over 1 percent.

In mainland China, where markets are largely sealed off from foreign investors, Shanghai’s benchmark gained 1.5 percent after the government said it would aid light industry and petrochemical suppliers in its latest stimulus measures. That came as the governor of the central bank of Australia, its own economy heavily reliant on Chinese demand for commodities, said China’s economy has already bottomed.

After Asian stocks lurched lower, European markets followed suit in early trade as the corporate gloom continued. Sweden-based automaker Saab filed for bankruptcy protection and said it had applied to spin off from its parent company General Motors, itself already in dire financial shape and hoping for billions more in U.S. government aid as the car industry shrivels.

Britain’s FTSE 100 retreated 2.6 percent, Germany’s DAX lost 3.4 percent and France’s CAC-40 was down 3.2 percent. With U.S. futures lower, Wall Street was poised to drop further. Dow futures fell 120, or 1.6 percent, to 7,342 and S&P500 futures were down 12.6, or 1.6 percent, to 766.80.

As in the U.S., there was little news in Asia to lure buyers.

In Thailand, exports plummeted 26.5 percent in January — their steepest fall in 12 years. It was just the latest evidence that Asia’s export-driven economies are getting hammered as demand for their cars, cameras and other goods vanishes in the West.

Technology shares were also under pressure after Hewlett Packard Co., the world’s top seller of personal computers, posted a 13 percent drop in quarterly profit and slashed its forecast for 2009.

Japanese chipmaker Elpida Memory Inc. plunged 14.7 percent after Standard & Poor’s cut its long-term corporate credit rating on the company and warned of further downgrades. South Korea’s Hynix, the second-biggest computer-memory chipmaker, lost 5.4 percent. Taiwan Semiconductor Manufacturing dropped 3.3 percent.

Overnight in New York, investors unloaded financial heavyweights Bank of America and Citigroup amid concerns that banks will need even more capital to restore their health.

The Dow lost 89.68, or 1.2 percent, to end at 7,465.95, with broader indices slipping as well.

The Standard & Poor’s 500 index ended down 9.48, or 1.2 percent, to 778.94. The index finished above its Nov. 20 close of 752.44, which was its worst finish since April 1997.

The dollar gave up gains against the yen, falling to 93.96 yen from 94.06 yen earlier. The euro fell to $1.2614, down from $1.2667.

In oil, light, sweet crude sank $1.28 to $38.18 per barrel in Asian trade, reversing strong gains overnight.

The contract jumped Thursday, rising 7 percent, or $2.77, to settle at $40.18 in U.S. trade after a report showed crude stocks were far less than expected. The vast majority of trades have shifted to the April contract with the March contract expiring Friday.