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TOKYO: Asian stocks took another battering on Thursday, tracking a sell-off on world markets driven by more gloomy profit news and deepening fears of a global recession ahead.
News that world leaders will hold a crisis summit shortly after the US presidential election next month did little to stem apparent panic selling, spurred by worries that the worldwide economic slowdown will only get worse.
All Asian markets saw serious losses. Tokyo's Nikkei index fell 2.46 per cent, Australia closed down off 4.4 per cent while Hong Kong was down 4.6 per cent at the break.
"The market is just disgraceful," said Ric Klusman, a dealer at Aequs Securities in Sydney. "There is no light at the end of the tunnel yet."
The White House announced it would host a summit of the G-20 group of nations to address the worst financial crisis since the Great Depression of the 1930s.
The summit will be held on November 15, less than two weeks after the US presidential election.
White House spokeswoman Dana Perino said the gathering would "agree on a common set of principles for reform of the regulatory and institutional regimes for the world's financial sectors."
Reforming how countries conduct their commercial and financial business has become an urgent issue as the current crisis, which began with problems on the US housing loan market last year, has intensified.
Defaults on so-called subprime mortgage loans, which were re-packaged in complex investment instruments and re-sold around the world, set off a chain reaction of problems for banks and other institutions across the globe.
Japan's central bank said it had injected 600 billion yen (US$6.2 billion) into the short-term money market on Thursday amid the latest sell-off of shares.
The International Monetary Fund meanwhile moved Wednesday to bail out cash-strapped Pakistan, which could need as much as US$15 billion to help handle a slew of foreign debts.
But while massive bailouts, cash injections and other government measures have helped to ease some of the worries about the banking sector, a global economic slowdown has given markets plenty of other worries.
"Having taken action on the banking system, we must now take action on the global financial recession," British Prime Minister Gordon Brown told parliament on Wednesday.
He said recession was "likely" in Britain, and his comments came amid worries that recession - generally defined as two straight quarters of negative economic growth - is also on the cards elsewhere.
Brown said recession was also likely in the United States, France, Italy, Germany and Japan.
On Wednesday, the Dow Jones Industrial Average in the United States lost 5.7 per cent, the London FTSE fell 4.5 per cent, the Paris CAC 40 plunged 5.1 per cent and Frankfurt's Dax dropped 4.5 per cent.
All Asian markets were off on Thursday.
South Korean shares closed down 7.4 per cent. Singapore was off 3.7 per cent, the Philippines closed down 4.6 per cent, Shanghai lost 2.4 per cent and Taiwan was down 3.1 per cent.
New Zealand closed 3.2 per cent in the red.
Fears of recession in Europe also helped push the euro to a more than six-year low against the yen.
The euro was trading at 123.60 yen, down from 125.82 the previous day.
The British pound has also fallen heavily this week. It hit a five-year low at 1.6139 to the dollar on Wednesday before a slight rebound in Tokyo trade on Thursday morning.
- AFP/yb
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