World stock markets resumed their slide yesterday, with Japan’s Nikkei stock index falling to a 26-year low as government rescue measures failed to ease fears of a prolonged global recession.
Investors seemed loath to wade back into securities following last week’s sell-off, worried a stream of economic data from the US this week could bring more bearish news about the world’s largest economy and trigger another round of selling. Selling by investment managers, bracing for another wave of redemptions, also fed the declines, analysts said.
“We’re seeing a lot of panic selling,” said Peter Lai, investment manager at DBS Vickers in Hong Kong. “People are just liquidating ... Nobody can predict where the bottom is.”
Tokyo’s Nikkei 225 index, after trading higher in the morning, closed down 6.4 percent at 7,162.90 — the lowest since October 1982.
Hong Kong’s Hang Seng Index fell 12.7 percent to 11,015.84, its lowest close in more than four years.
European markets followed Asia lower, with benchmarks in Britain, Germany and France trading down more than 4 percent or more in early trading.
On Wall Street on Friday, the Dow Jones industrial average fell 312.3, or 3.59 percent, to 8,378.95. Early yesterday, stock index futures were down, signaling a lower open. Dow futures were down 268 points, or 3.2 percent, at 7,994. S&P futures were down about 4 percent.
The sharp declines yesterday came amid another round of government measures to boost markets. Australian and Hong Kong central bankers injected funds into their markets to ensure liquidity.
Thai Finance Minister Suchart Thadathamrongvej said in Bangkok yesterday that state-owned banks would lend about 90 billion baht (US$2.6 billion) to small businesses and farmers to support economic growth and ease tightening credit.
Only South Korea’s market managed to eke out gains, perhaps in part because of the big rate cut there. The benchmark Kospi ended 0.8 percent higher at 946.45.
In China, the benchmark index slumped to its lowest level in more than two years as investors reacted to dismal earnings reports. The Shanghai Composite Index lost 6.3 percent, or 116.27 points, to 1,723.35. It is now down about 72 percent from its peak about a year ago.
“The panic spread much faster than we expected. It’s as if everyone wants to be the fastest runner, with the best escape,” said Feng Yuming, an analyst for Oriental Securities in Shanghai.
In the Philippines, the key index plummeted 12.3 percent to 1,713.83 points, triggering a circuit-breaker that automatically halted trading for 15 minutes.
The biggest one-day drop since February last year was caused by “big fund players” withdrawing investments to get cash and meet redemptions at home, traders said.