Asian shares dive as Fed cut sparks emerging market fears

Asian markets slumped Thursday, extending a global rout on renewed fears about emerging economies after the US Federal Reserve pressed ahead with its stimulus reduction and central banks in Turkey and South Africa jacked up interest rates. The dollar and euro sank against the yen as dealers scurried into safer investments after the Fed decision, while Asian sentiment took a further blow from data showing Chinese manufacturing contracted in January. Tokyo dived 3.33 percent by the break, Sydney shed 1.00 percent, Hong Kong fell 1.42 percent and Shanghai lost 0.20 percent. Singapore was down by 1.02 percent, Manila by 1.37 percent and Jakarta 1.15 percent. Taipei and Seoul were closed for public holidays. Wall Street sank on Wednesday after the Fed said it would reduce its bond-buying programme by $10 billion a month to $65 billion, citing a pick-up in the US economy. The move followed a similar announcement in December. Investors took flight after the announcement, which stoked fears of huge capital flows from emerging markets that have benefited from the Fed's cheap money policies, as dealers look for safer investments back home. In New York the Dow dived 1.15 percent, the S&P 500 fell 1.01 percent and the Nasdaq shed 1.14 percent. London, Frankfurt and Paris were all down too ahead of the Fed announcement, according to AFP.