Asian stocks sink amid anxiety over world economy

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(Agencies)
Updated: 2009-03-09 16:25

HONG KONG – Asian stock markets sank Monday, with Japan's benchmark tumbling to a 26-year closing low, amid deepening anxiety that economies in the US and elsewhere will take far longer to emerge from recession.

Investors continued to shun banks on worries they still haven't raised enough capital to make up for their colossal losses. Heavyweight bank HSBC, Europe's biggest, tumbled over 12 percent Hong Kong trade.

A man checks an electronic board showing Monday's stock prices at the Tokyo Stock Exchange in Tokyo, March 9, 2009. Japan's benchmark Nikkei stock index lost 57.91 points, or 0.81 percent, from Friday to end morning trade at 7,115.19. [Agencies]

Japanese shares, already among Asia's worst performing this year, crumbled to a 26-year low after the world's second-largest economy posted a record current account deficit in January. Oil prices, meanwhile, were higher ahead of an anticipated production cut from OPEC.

Recent losses in Asian markets, while somewhat tame compared to those in the West, have still been severe as investors ratchet down their expectation for global growth in the face of abysmal economic data and signs of ongoing struggles at banks and major firms like General Motors.

"Sentiment is terrible," said Ben Pedley, managing director of LGT Investment Management Ltd. in Hong Kong. "We're going to be in a funk, not only in Asia, but in the rest of the world for the next year or two."

Japan's Nikkei 225 stock average fell 87.07 points, or 1.2 percent, to 7,086.03, and Hong Kong's Hang Seng lost 299.38, or 2.5 percent, to 11,622.14.

Weighing on Hong Kong were steep falls in mainland markets. Shanghai's benchmark plummeted 3.4 percent.

Stock measures in India, Singapore and Taiwan also fell; those in South Korea and Australia gained 1.6 percent and 0.3 percent respectively.

Friday in New York, Wall Street ended a volatile session slightly higher after investors digested news that the world's largest economy shed 651,000 jobs last month. The unemployment rate jumped to a 25 year high of 8.1 percent.

The Dow rose 32.50, or 0.5 percent, to 6,626.94. The Standard & Poor's 500 index rose 0.83, or 0.1 percent, to 683.38, while the Nasdaq composite index fell 5.74, or 0.4 percent, to 1,293.85.

Wall Street futures pointed to a lackluster open in the US Dow futures were down 21 points, or 0.3 percent, at 6,653 while S&P500 futures fell 3.7 points, or 0.5 percent, to 684.10.

In Hong Kong, the broader market was also hurt by the downward spiral of HSBC Holdings PLC. The British lender plunged 12.9 percent to HK$37.9 — its lowest point in over a decade — ahead of its offering of new shares to raise capital. Just last year, its stock traded above HK$130.

In Japan, lender Shinsei Bank Ltd lost 8.8 percent after saying Friday it will issue preferred shares to shore up its capital base.

In the oil market, benchmark crude for April delivery rose 73 cents to $46.25 a barrel in Asia as investors anticipated another OPEC production cut will shrink global supplies.

The dollar rose to 98.46 yen from 98.27 yen. The euro traded at $1.2654 from $1.2672.