Asian stocks plunge on credit fears
Updated: 2007-08-10 14:42
TOKYO -- Asian stocks plunged Friday as fallout spread from global market turmoil set off by concerns about credit weakness in the US. The Bank of Japan joined its US and European counterparts in pouring cash into money markets to calm growing jitters.
 A trader listens to a colleague on the floor of the Philippines Stock Exchange, where the index fell into the red, in Makati City, Metro Manila August 10, 2007. Asian stocks fell across the board on Friday and the yen extended gains as investors dumped riskier assets following a rout in global markets sparked by a flare-up in credit jitters. [Reuters] |
The Nikkei 225 index dropped 406.51 points, or 2.37 percent, to close at 16,764.09 points on the Tokyo Stock Exchange. The broader Topix index, which includes all shares on the exchange's first section, fell 49.88 points, or 2.96 percent, to 1,633.93.
The Korea Composite Stock Price Index fell as much as 80.88 points, or 4.24 percent, to 1,827.80 with issues falling across the board, especially financial stocks.
Asian markets across the region followed the general slump.
Hong Kong's blue chip Hang Seng Index was down 3 percent midday at 21,771.94. Singapore's Straits Times Index was down 3.4 percent at 3,298.88. The Philippine benchmark index was also off 3 percent, and the standard market measure in Australia was down 2.8 percent.
The plunge came after the Dow Jones industrial average fell 387.18, or 2.83 percent, to 13,270.68 in New York on Thursday after a French bank announced it was freezing funds that invested in US subprime mortgages, deepening fears of a credit crunch.
Amid Friday's decline, the Bank of Japan said it injected 1 trillion yen ($8.39 billion) into money markets to curb rises in a key overnight interest rate.
The injection followed similar moves by its European and US counterparts overnight.
The European Central Bank provided more than $130 billion to money markets, the bank's biggest infusion ever.
The US Federal Reserve also added a larger-than-normal $24 billion in temporary reserves to the US banking system.
In South Korea early Friday, blue chip stocks Samsung Electronics Co., the country's largest corporation, and Posco, the world's fourth-largest steelmaker, were down 2.6 percent and 3.6 percent, respectively.
Moves in international markets affect the Korean index, said Kang Moon-sung, a strategist at Korea Investment and Securities Co.
"So no one is confident this level is (the) bottom," Kang said.
The index has been on a tear for most of this year, rising as much as 40 percent. Last month, the benchmark closed past 2,000 for the first time.
Japan's government spokesman Yasuhisa Shiozaki tried to play down the fears about the fallout on the world's second largest economy.
"Our economy is recovering smoothly, spurred by private sector demand," Shiozaki told reporters Friday. "The government will continue to closely watch share prices and overall economic indicators," he said.
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