Asian stocks battered on fears for global economy
Posted: 08 October 2008 1928 hrs

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HONG KONG - Stocks in Asia were battered Wednesday, with Tokyo losing more than nine per cent, despite government measures to pump money into the market as investors grew more concerned for the global economy.

Hong Kong plummeted more than eight per cent while many of the region's other major indexes shed at least five per cent as multi-billion-dollar injections by Australia and Japan as well as a rate cut in Hong Kong failed to lift confidence.

Tokyo's Nikkei plummeted 9.38 per cent, its worst fall since the 1987 "Black Monday" crash, while Sydney shed five per cent. Hong Kong tanked 8.2 per cent to its lowest level in more than two years and Singapore lost 6.6 per cent.

Elsewhere, Seoul slid 5.8 per cent and Taipei dived 5.76 per cent.

And in Jakarta the market was suspended due to "irregularities" after it slumped 10.4 per cent.

The falls came despite Tokyo ploughing another 2.1 trillion yen (20.7 billion dollars) into the markets, its 16th straight day of intervention, while Australia injected more than 850 million dollars.

It also came despite Hong Kong's de facto central bank lowering interest rates by one per cent a day after a similar move in Australia lifted regional sentiment on hopes other world policymakers would follow suit.

"These sorts of measures aren't working anymore. It's like you're trying to pump blood into a heart with clogged arteries," said Hiroichi Nishi, a broker at Nikko Cordial.

It was the third-biggest loss in the history of Asia's largest bourse, surpassing the slump after the September 11, 2001 attacks on the United States.
The Nikkei is now at its lowest level in five years.

Japanese Prime Minister Taro Aso said the plunge was "beyond our imagination", adding that he sensed "huge fears" in the public.

Shanghai fared best of the major indexes, shedding just over three per cent.

The latest plunge came after Wall Street's Dow Jones Industrial Average sank more than 500 points or five per cent on Tuesday to a five-year closing low.

Later in the day, Japan's lower house approved an 18-billion-dollar emergency budget to stimulate the country's ailing economy.

Amid the turmoil, the dollar slumped below 100 yen for the first time in six months, with investors flocking to the Japanese currency as a safe haven. That sent many Japanese exporters down as a strong yen makes their products more expensive.

World markets have been plummeting in recent weeks following the collapse of US investment bank Lehman Brothers and the government bailout of insurer AIG.

A 700-billion-dollar rescue package for the ailing US financial system agreed by lawmakers in Washington last week failed to lift investors despite.

Later Wednesday, the British government announced a multi-billion-dollar rescue package for banks to ease its battered economy.

In other markets, Wellington was 1.86 per cent down, Manila was almost five per cent off, Kuala Lumpur was 2.7 per cent lower, Bangkok lost 6.88 per cent and Indian shares fell 3.14 per cent.

- AFP/ir