Tue, Oct 23, 2007 - Page 12 News List

Asian markets suffer day of decline

RATTLED On the 20th anniversary of a market crash, a US decline led to region-wide drops, with Hong Kong shares suffering their largest single-day losses in seven years

AFP , LONDON AND TAIPEI

World equity markets spiraled lower yesterday as Asia and Europe took their cue from a pre-weekend Wall Street slump sparked by renewed US economic fears, credit concerns and record high oil prices.

Investors were rattled by a steep US decline on Friday, when worries about the outlook for the world's largest economy grew amid poor earnings news on the 20th anniversary of the New York market crash.

Taiwan share prices closed sharply lower yesterday, with the benchmark TAIEX closed down 251.09 points, or 2.61 percent, at 9,360.63, on turnover of NT$149.30 billion (US$4.58 billion). Shares plunged as much as 3.5 percent during the day.

Elsewhere in Asia, Hong Kong shares suffered their biggest fall in one day in more than seven years, while Tokyo, Seoul and other major bourses also dropped sharply.

The European single currency also hit a record high US$1.4347. A strong euro makes eurozone exports more expensive for buyers using weaker currencies, and therefore weighs on European shares.

Frankfurt, London and Paris stock markets slid by more than 1 percent on Monday.

"After having triggered a downturn across the region today, Wall Street holds the key if the markets can quickly stabilize," Jih Sun Securities Investment (日盛投顧) deputy manager Wilson Lien (連偉勝) said.

The Taiwan market, in particular, will depend on how technology shares on NASDAQ and those included in the Philadelphia Semiconductor Index perform in the immediate term, he said.

The plunge on Wall Street has sent shockwaves at a time when local technology stocks have started showing signs of picking up momentum and possibly leading the market toward the year's high of 9,807 points attained in late July, Lien said.

Across Asia, Tokyo led the way lower, dropping more than 3 percent in early deals as a stronger yen weighed heavily on exporters. Asia's largest market managed to recover some of its losses in late trade to end down 2.24 percent.

Elsewhere, Seoul lost 3.36 percent, Manila gave up 3.98 percent and Jakarta slumped 3.8 percent.

Singapore ended 2.81 percent lower, Shanghai slipped 2.59 percent and Sydney finished trade with a loss of 1.9 percent.

The US dollar also suffered fresh losses after G7 finance chiefs refrained from voicing increased concern about currencies, which markets took as a green light to drive the greenback to a new record low against the euro.

The yen shot higher, hitting Japanese exporter shares, as the latest stock market rout prompted investors to unwind risky bets funded by selling the Japanese unit.

In Taipei, the NT dollar closed at NT$32.570 over the US dollar.

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