Asia Stocks Tumble!

Source Straits Times

HONG KONG - ASIAN stocks tumbled on Thursday, tracking declines on Wall Street as investors feared more companies could succumb to the global financial crisis that forced the US to bail out troubled insurer American International Group.

Every regional benchmark fell deeply in the red.

Hong Kong's Hang Seng Index led the region's losses, tanking 1,272.86 points, or 7.22 per cent, to 16,364.33 - its lowest level in over two years.

In Japan, the Nikkei 225 stock index was down 445.67 points, or 3.79 per cent, at 11,304.12.

Australia's S&P/ASX200 index fell more than 3.5 per cent, South Korea's Kospi lost 3.6 per cent and Shanghai's index fell 5.8 per cent.

The losses tracked US markets, where the Dow Jones industrial average fell about 450 points, or 4.06 per cent, to 10,609.66.

Investors were unsettled by the Federal Reserve's US$85 billion (S$121.5 billion) loan to AIG, the huge US insurer that lost billions in the risky business of insuring against bond defaults.

It was the latest financial giant to fall in a historic financial crisis on Wall Street that's already claimed investment banks Lehman Brothers and Merrill Lynch.

'It's a complete collapse of confidence,' said Mr Francis Lun, general manager of Fulbright Securities in Hong Kong.

'The financial crisis in the US is hitting everyone, everyone is running for cover. If the largest insurance company can fail, than no one is safe.'

As equities markets staggered, investors fled to gold, seen as a safe haven in times of trouble.

Gold for December delivery rose as much as US$90.40, or 11.6 per cent, to US$870.90 an ounce in after-hours trading on the New York Mercantile Exchange after jumping US$70 to settle at US$850.50 in the regular session.

Oil rose above US$97 in Asian trade on Thursday, extending its big gains overnight. The dollar was little changed at 104.32 yen and the euro rose to US$1.4345.

Financial stocks across Asian went into a tailspin.

Japan's three megabanks fell hard: Mizuho Financial Group, sank 7.2 per cent, Mitsubishi UFJ Financial Group, shed 4.6 per cent, and Sumitomo Mitsui Financial Group retreated 7.4 per cent.
Leading China lender Industrial & Commercial Bank of China, or ICBC, fell over 5 per cent in Hong Kong.

Macquarie Group, Australia's biggest investment bank and securities firm, took an 18 per cent nosedive.

Mr Richard herring, the director of trading at Burrell Stockbroking, said Australian investors were nervous about AIG bailout.

'It has actually opened up a whole lot of other questions for investors to answer and that is: AIG is on the rack, what else is potentially out there that could go under?' Mr Herring said.

Major exporters including auto makers and electronics firms also wilted, hurt by a sagging dollar and slowing overseas markets.

In Japan, Nintendo, maker of the popular Wii game console, tumbled 4.4 per cent after earlier hitting a near year-low.

Indian shares were also hit, plunging five per cent within minutes of trade opening on Thursday, joining a fresh sell-off across Asia.

SINGAPORE shares dropped further at midday with the benchmark Straits Times Index (STI) down 109.77 points, or 4.75 per cent at 2,309.52. Up to 594.8 million shares exchanged hands. Losers beat gainers 476 to 76.

KUALA LUMPURAt 12.30pm today, there were 32 gainers, 631 losers and 106 counters traded unchanged on the Bursa Malaysia.

The KLCI was at 965.46 down 37.53 points, the FBM2BRD was at 4,830.74 down 159.45 points, and the FBMEmas was at 6.407.27 down 541.48 points.

Turnover was at 241.834 million shares valued at RM527.042 million (S$222 million).

HONG KONGHong Kong shares fell more than 7 per cent on Thursday to more than 2-year lows, as fears of possible further US bank failures sent shares in Chinese financials tumbling.

The blue-chip Hang Seng Index tanked 1350.1 points, or 7.7 per cent, to 16287.09. The benchmark last traded at that level in July 2006.