Alexa
  • Directory of Taiwan

Asian markets tumble in wake of Wall Street sell-off

Asian markets tumble in wake of Wall Street sell-off

Asian markets tumbled Wednesday following a plunge on Wall Street amid simmering concerns over global credit market turmoil and fears the U.S. Federal Reserve won't do enough to ease a credit crunch.
Japan's benchmark Nikkei 225 index sank 2.59 percent by the end of Tokyo's morning session, while South Korean shares tumbled 3.1 percent. Toyota, Sony and Samsung were among decliners.
Hong Kong's benchmark Hang Seng index was down 2.5 percent and Singaporean stocks slid 2.6 percent. Markets in Australia, Taiwan, the Philippines, Malaysia and New Zealand were also down.
Overnight in New York, the Dow Jones industrial average sank 280.28, or 2.10 percent, to 13,041.85, its biggest drop since Aug. 9. Investors grew more uneasy about whether the Fed, the U.S. central bank, will take the steps needed to prevent credit market problems from spreading further.
The U.S. market has been volatile in recent weeks as rising defaults on subprime mortgages has hit some brokerages and hedge funds that held mortgage-backed securities and made banks less willing to lend money.
Worries about a slowdown in the U.S. economy _ a key Asian export market _ heightened after a report Tuesday said U.S. consumer confidence sagged in August.
Investors in the U.S. were disappointed that minutes from the Fed's last meeting Aug. 7, released Tuesday, didn't discuss a cut in the benchmark federal funds rate. The meeting predated a number of actions taken by the central bank to try to alleviate market turbulence, including the Aug. 17 lowering of the discount rate, the interest the Fed charges banks to borrow money. But Wall Street seems to be growing more dissatisfied because the Fed has not yet lowered the funds rate.
The market volatility also strengthened the yen as investors backed away from yen-carry trades. To exit the trades, investors have to buy yen to repay cheap yen loans. The dollar was trading at 114.06 yen midmorning, down from 114.56 yen Tuesday in New York.
The yen's strength in turn caused traders to dump exporters like Toyota Motor Corp. and Sony Corp., which were both down 3.5 percent. The stronger yen makes Japanese exports more expensive and less competitive overseas.
In South Korea, Samsung Electronics Co., the country's biggest corporation, fell 2.4 percent and Hyundai heavy Industries Co., the world's largest shipbuilder, declined 1.3 percent.
The Korea Composite Stock Price Index, or Kospi, has recovered slightly from its morning lows, and at midday is down 1.0 percent at 1,811.17.


Updated : 2021-05-14 20:03 GMT+08:00