Asian stocks slump on oil price, US jobless surge
Tuesday, 10 June 2008
TOKYO, June 09 (AFP): Asian stocks tumbled Monday after a breathtaking surge in oil prices and shock jump in US unemployment sent Wall Street spinning and fanned fears of sharply slower economic growth.
Japanese shares slid just over two percent after a dizzying three-percent plunge in the US Friday, when oil prices rocketed the most ever in a single day to close nearly 11 dollars up at record levels around 139 dollars per barrel.
Taiwan, Singapore and South Korea were also around two percent down as morning trading drew to a close in Asia, where investors were still coming to terms with Friday's half-point jump in US unemployment to 5.5 percent for May.
"Asian markets are certainly in for a heavy pounding over the next few weeks," Andy Xie, a former Morgan Stanley economist now working independently from Shanghai, told AFP.
Investors worry that sky-high crude oil costs will bleed money from consumers, squeeze business profits and force central banks to raise borrowing costs in a bid to tame inflation, which has taken off in many countries.
That could hit economic growth even as the world economy struggles to recover from the default crisis among subprime-or riskier-US mortgages, which according to the IMF threatens losses of nearly one trillion dollars.
"A lot of people were hopeful that the US could avoid recession. What happened Friday dashed those hopes, which were pretty far-fetched, since a huge credit bubble has just burst," Xie said.
Elsewhere, Indonesia was around one percent down Monday and Malaysia fell 1.5 percent. Both nations have sharply raised fuel prices recently as multi-billion-dollar official energy subsidies become unaffordable across Asia.
Japanese shares slid just over two percent after a dizzying three-percent plunge in the US Friday, when oil prices rocketed the most ever in a single day to close nearly 11 dollars up at record levels around 139 dollars per barrel.
Taiwan, Singapore and South Korea were also around two percent down as morning trading drew to a close in Asia, where investors were still coming to terms with Friday's half-point jump in US unemployment to 5.5 percent for May.
"Asian markets are certainly in for a heavy pounding over the next few weeks," Andy Xie, a former Morgan Stanley economist now working independently from Shanghai, told AFP.
Investors worry that sky-high crude oil costs will bleed money from consumers, squeeze business profits and force central banks to raise borrowing costs in a bid to tame inflation, which has taken off in many countries.
That could hit economic growth even as the world economy struggles to recover from the default crisis among subprime-or riskier-US mortgages, which according to the IMF threatens losses of nearly one trillion dollars.
"A lot of people were hopeful that the US could avoid recession. What happened Friday dashed those hopes, which were pretty far-fetched, since a huge credit bubble has just burst," Xie said.
Elsewhere, Indonesia was around one percent down Monday and Malaysia fell 1.5 percent. Both nations have sharply raised fuel prices recently as multi-billion-dollar official energy subsidies become unaffordable across Asia.