Stock bloodbath as fear prevails

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(China Daily)
Updated: 2008-10-11 08:28

A massive sell-off on Wall Street overnight and escalating fears of a global recession sent Asian stocks plunging on Friday, with Japan's key index shedding nearly 10 percent to close out its worst week in history.

Despite recent moves by the world's central banks to thaw frozen credit markets and boost investor confidence, their efforts have fallen flat as markets hurtled toward a global equity crisis.

Investors across the region inundated exchanges with sell orders, dragging all benchmarks sharply lower.

Key indices in Hong Kong, Singapore, the Philippines and India were all down about 8 percent. South Korea's Kospi closed down 4.1 percent, while the Shanghai Composite Index posted a more moderate decline of 2.8 percent.

In Tokyo, the benchmark Nikkei 225 index tumbled 881.06 points, or 9.6 percent, to 8,276.43, its lowest closing level since May 2003. It was its biggest one-day percentage loss since the stock market crash of October 1987.

"Selling is unstoppable in New York and Tokyo," said Yutaka Miura, senior strategist at Shinko Securities Co Ltd in Tokyo. "Investors were gripped by fear."

In Australia, where the S&P/ASX200 plummeted a record 8.3 percent, market watchers were calling it "Black Friday".

The regional sell-off follows a 7.3 percent plunge in the Dow Jones Industrial Average on Thursday to close below the 9,000-line for the first time in five years.

"There's no bottom to the stock markets now," said Francis Lun, general manager at Fulbright Securities Ltd in Hong Kong. "There's no clue when it will stop."

In New York, stock prices swung sharply in early trading on Friday. The Dow Jones industrials, down nearly 700 points in the opening minutes of trading, recovered to slight gain and then headed lower again.

European shares plunged on Friday, with the FTSEurofirst 300 index of top European shares down 7.8 percent, having lost as much as 9.9 percent earlier to hit its lowest level since June 2003.

US President George W. Bush said on Friday that the US government's financial rescue plan was aggressive and big enough to work, but would take time to fully kick in.

"We are a prosperous nation with immense resources and a wide range of tools at our disposal ... We can solve this crisis and we will," Bush said in brief remarks from the White House Rose Garden.

The president noted that major Western economies were working together in an attempt to stabilize markets and end the spreading panic.

Agencies