Asian stocks tumbled this week, with a regional index falling by the most in almost three years, amid intensifying concern that the global economy is headed for a recession.
Esprit Holdings Ltd, a Hong Kong-listed clothing retailer that gets most of its sales in Europe, tumbled 33 percent this week as the currency union’s risk watchdog warned of growing threats to global financial markets.
Honda Motor Co, Japan’s second-largest carmaker, sank 7.1 percent. BHP Billiton Ltd, the world’s No. 1 mining company by market value, slid 9.6 percent, and CNOOC Ltd (中國海洋石油), China’s largest offshore oil producer, tumbled 15 percent as commodity prices tumbled after the US Federal Reserve warned of “significant” risks to the economy.
“It would be flippant to suggest this is just a blip,” said Tim Schroeders, who helps manage US$1 billion in equities at Pengana Capital Ltd in Melbourne. “The aggressive selling of equity markets seems to reflect a heightened probability that the world is moving toward a recession.”
In Taiwan trading on Friday, the TAIEX fell 259.28 points, or 3.6 percent, to 7,0246.22, the lowest close since Sept. 2, 2009. The gauge has dropped 7 percent this week, the steepest drop in seven weeks.
The MSCI Asia Pacific excluding Japan Index fell 10.3 percent this week to 371.85. Japanese markets were closed on Monday and Friday for public holidays.
The gauge joined other global indexes in entering bear markets for the first time in more than two years.
Hong Kong’s Hang Seng Index tumbled 9.2 percent and the MSCI China Index sank 11 percent, their third-worst weekly declines since August 2001, after a report showed that China’s manufacturing may contract for a third month this month.
New Zealand’s NZX 50 Index, which through Sept. 22 was the only developed market benchmark index to have recorded any gain this year, fell 0.3 percent, erasing its advance for this year and joining a global bear market that has wiped more than US$8 trillion from equities in the past two months.
Japan’s Nikkei 225 Stock Average sank 3.4 percent for its holiday-shortened trading week. South Korea’s KOSPI dropped 7.8 percent. Australia’s S&P/ASX 200 Index lost 5.9 percent, and Singapore’s Straits Times Index retreated 3.2 percent. Indonesia’s Jakarta Composite Index tumbled 11 percent, the worst performance of any benchmark index in Asia.
In other markets on Friday:
Manila slumped 5.13 percent, or 210.14 points, from Thursday to end at 3,885.96.
Friday’s fall — the worst in a single day since October 2008, at the beginning of the financial crisis — sent the index to a seven-month low as foreign investors pulled out.
Wellington closed 0.89 percent, or 25.58 points, lower from Thursday at 3,282.71.
Indian shares fell 1.22 percent, or 199.09 points, from Thursday to 16,162.06 and the rupee slid to a 28-month low against the US dollar.
The currency slipped to 50 rupees against the dollar briefly, a level last seen in May 2009, before recovering to 49.09 after suspected central bank intervention.
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