Asian markets disappointed with Federal rate cut
Thursday, 13 December 2007
TOKYO, Dec 12 (Internet): Shares fell across the Asia Pacific region Wednesday as investors seemed worried by the US Federal Reserve's statement that the US economy was slowing, and that its 25 Hong Kong shares led the retreat, with the Hang Seng index falling as much as 3 per cent at one point. Chinese shares also dropped sharply as inflation reached an 11-year high, raising fears that Beijing would have to tighten monetary policy.
Hong Kong shares led the retreat, with the Hang Seng index falling as much as 3 per cent at one point. Chinese shares also dropped sharply as inflation reached an 11-year high, raising fears that Beijing would have to tighten monetary policy.
David Cohen, head of Asian economic forecasting at Action Economics in Singapore, said Asia's markets were moving in sympathy with Wall Street, where the S&P 500 index fell by 2.5 per cent overnight
"Hopes in Asia had got a little inflated ahead of the Federal open market committee meeting," Cohen said.
"There's so much uncertainty overhanging the world at the moment. But so far the data in Asia have been reasonably encouraging."
In Tokyo, the benchmark Nikkei 225 average slumped 0.7 per cent to 15,932.26, while the broader Topix index was 0.6 per cent lower at 1,556.93.
The US Fed lowered its benchmark rate to 4.25 per cent Tuesday and said "economic growth is slowing".
Japan's largest banks were slightly lower. Mizuho fell 1.9 per cent to Y623,000, Mitsubishi UFJ Group was off 0.2 per cent at Y1,225 and Sumitomo Trust & Banking was 3.8 per cent lower at Y869.
IHI Corp, the heavy machinery and jet engine maker, plunged 11 per cent to Y216, its lowest level in over two years. The company Tuesday was placed on the Tokyo Stock Exchange's supervisory list for possible delisting, after it said it would restate earnings figures from last year.
Hong Kong shares led the retreat, with the Hang Seng index falling as much as 3 per cent at one point. Chinese shares also dropped sharply as inflation reached an 11-year high, raising fears that Beijing would have to tighten monetary policy.
David Cohen, head of Asian economic forecasting at Action Economics in Singapore, said Asia's markets were moving in sympathy with Wall Street, where the S&P 500 index fell by 2.5 per cent overnight
"Hopes in Asia had got a little inflated ahead of the Federal open market committee meeting," Cohen said.
"There's so much uncertainty overhanging the world at the moment. But so far the data in Asia have been reasonably encouraging."
In Tokyo, the benchmark Nikkei 225 average slumped 0.7 per cent to 15,932.26, while the broader Topix index was 0.6 per cent lower at 1,556.93.
The US Fed lowered its benchmark rate to 4.25 per cent Tuesday and said "economic growth is slowing".
Japan's largest banks were slightly lower. Mizuho fell 1.9 per cent to Y623,000, Mitsubishi UFJ Group was off 0.2 per cent at Y1,225 and Sumitomo Trust & Banking was 3.8 per cent lower at Y869.
IHI Corp, the heavy machinery and jet engine maker, plunged 11 per cent to Y216, its lowest level in over two years. The company Tuesday was placed on the Tokyo Stock Exchange's supervisory list for possible delisting, after it said it would restate earnings figures from last year.