World markets plunge for second day
By HANS GREIMEL, Associated Press Writer 1 hour, 7
TOKYO - Stock markets plunged across much of Asia for
a second day Wednesday amid jitters about a sell-off
in China's stock market and a worries about a possible
slowdown in the Chinese and U.S. economies.
Shares in Tokyo, Hong Kong, Singapore, Malaysia,
Australia, New Zealand, the Philippines and Indonesia
all tumbled more than 3 percent in morning trading,
following dismal overnight losses on Wall Street, the
worst since the Sept. 11, 2001, terrorist attacks.
In China, stock modestly recovered from their 9
percent plunge Tuesday their biggest drop in a
decade. The Shanghai Composite Index was up 1.2
percent to 2,804.28.
But investors in other Asian markets dumped shares
Wednesday, with Japan's Nikkei 225 stock index down
644.85 points, or 3.56 percent, to 17,475.07 points at
the close of the morning session.
Hong Kong's Hang Seng Index was down 3.8 percent,
while Australia's benchmark S&P/ASX200 index shed 3.5
percent. Indonesian shares lost 5.2 percent, while
Philippine stocks plunged 9.4 percent.
The trouble began Tuesday just one day after Chinese
stocks hit a record as investors unloaded shares to
lock in profits amid speculation about a fresh round
of austerity measures from Beijing to slow the
nation's sizzling economy.
The Shanghai Composite Index tumbled 8.8 percent, its
largest decline since Feb. 18, 1997. In New York, the
Dow Jones Industrial Average slid 416 points, or 3.3
percent, to 12,216.24. Main European indexes fell
about 3 percent.
Investors were also spooked by comments Monday from
former U.S. Federal Reserve Chairman Alan Greenspan,
who said a recession in the U.S. was "possible" later
On Wednesday, Australian Treasurer Peter Costello
predicted the plunge in China's share market would
trigger "volatility on equity markets for some time."
But his overall assessment of China's economy was
positive, telling reporters the Asian giant would
continue to grow, albeit "in fits and starts."
Japan's Chief Cabinet Secretary Yasuhisa Shiozaki
tried to quell concerns about the Tokyo market saying
the overall fundamentals in Japan were still strong.
"On a broad perspective the corporate sector continues
to perform well," Shiozaki said. "A long-term economic
recovery is continuing."
Some regional brokers said they saw an element of
panic selling among retail investors but that more
experienced investors were sitting it out. Other
market players were on the look out for bargain
hunters to emerge later in the session.
Australian brokers said they were confident the fall
was a correction, not the start of a bear market.
"I'd put a number of say 3-5 percent on it today,"
said AMP chief economist Shane Oliver, adding that the
drops could extend to 10 percent in the next few
weeks. "I don't see it having major economic
implications and therefore I'm pretty confident it's
just a correction."