Asia stock markets drop sharply
Friday, 19 September 2008
HONG KONG, Sept 18 (AFP): Asian stock markets dropped sharply again Thursday as the global financial crisis deepened on reports of trouble at more US banks, including Wall Street powerhouse Morgan Stanley.
Markets across the region fell hard in early trade, as the bold 85 billion dollar US bailout of insurance giant AIG failed to calm worries that other stalwart firms would be brought down in the growing storm.
Hong Kong was off 5.30 per cent, Japan shed 3.20 per cent, Australia dropped 3.50 per cent and Taiwan was down 4.50 per cent.
The declines tracked another session of woe overnight on Wall Street, where the Dow Jones dropped 4.06 per cent and the Nasdaq lost 4.90 per cent.
"The market is trading under the assumption that every financial institution is going under," said Michael Petroff, portfolio manager for Heartland Advisors.
"It's now emotional," he said. "People have removed some part of the fundamentals and are only trading on momentum."
Shares in Morgan Stanley and Goldman Sachs-the last two major Wall Street investment banks standing following the recent upheavals-plunged dramatically in US trade, dropping 24 and 14 per cent respectively.
The Wall Street Journal and New York Times reported that Morgan Stanley, whose stock fell to its lowest level since 1998, was mulling a merger with Wachovia, a US commercial bank.
Meanwhile Britain's biggest mortgage lender HBOS reached a quick deal Wednesday to merge with rival Lloyds TSB.
Many market-watchers have blamed short-sellers for driving down the market, and the US Securities and Exchange Commission announced new restrictions effective Thursday to limit the practice.
Traders said the worry was turning into panic, following this week's collapse of Lehman Brothers and the US government's takeover of AIG. Some compared the crisis to the 1907 panic that saw a series of bank failures.
Jittery investors fled to gold for safety. Spot gold was up more than 80 dollars in Hong Kong, with prices around $868 an ounce.
The Bank of Japan injected emergency funds into the markets for a third straight day, putting in 1.5 trillion yen ($14.4 billion) to try to end the turbulence.
Bourses across Asia were sharply down.
Markets across the region fell hard in early trade, as the bold 85 billion dollar US bailout of insurance giant AIG failed to calm worries that other stalwart firms would be brought down in the growing storm.
Hong Kong was off 5.30 per cent, Japan shed 3.20 per cent, Australia dropped 3.50 per cent and Taiwan was down 4.50 per cent.
The declines tracked another session of woe overnight on Wall Street, where the Dow Jones dropped 4.06 per cent and the Nasdaq lost 4.90 per cent.
"The market is trading under the assumption that every financial institution is going under," said Michael Petroff, portfolio manager for Heartland Advisors.
"It's now emotional," he said. "People have removed some part of the fundamentals and are only trading on momentum."
Shares in Morgan Stanley and Goldman Sachs-the last two major Wall Street investment banks standing following the recent upheavals-plunged dramatically in US trade, dropping 24 and 14 per cent respectively.
The Wall Street Journal and New York Times reported that Morgan Stanley, whose stock fell to its lowest level since 1998, was mulling a merger with Wachovia, a US commercial bank.
Meanwhile Britain's biggest mortgage lender HBOS reached a quick deal Wednesday to merge with rival Lloyds TSB.
Many market-watchers have blamed short-sellers for driving down the market, and the US Securities and Exchange Commission announced new restrictions effective Thursday to limit the practice.
Traders said the worry was turning into panic, following this week's collapse of Lehman Brothers and the US government's takeover of AIG. Some compared the crisis to the 1907 panic that saw a series of bank failures.
Jittery investors fled to gold for safety. Spot gold was up more than 80 dollars in Hong Kong, with prices around $868 an ounce.
The Bank of Japan injected emergency funds into the markets for a third straight day, putting in 1.5 trillion yen ($14.4 billion) to try to end the turbulence.
Bourses across Asia were sharply down.