As Dow Tumbles, Asian Markets Follow

By JEREMIAH MARQUEZ
|  Friday, Feb 20, 2009  |  Updated 5:45 AM EDT
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As Dow Tumbles, Asian Markets Follow

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Asian markets fell as much as 2 percent Thursday after the Dow Jones suffered its biggest loss in nearly a decade.

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HONG KONG — Asian stocks market dropped Friday, with benchmarks in Japan and Hong Kong sliding 2 percent or more, after gnawing economic fears sent Wall Street tumbling to its lowest close in more than six years.

Investors found few reasons to wade into the market after the Dow Jones breached the levels it touched in November when the financial crisis sent global equities into a tailspin.

The Dow's miserable finish — its worst since Oct. 9, 2002, when the last bear market touched bottom — spurred fears the markets' downturn is far from over. It also provided a clear sign that investors don't see an immediate end to the worst global slowdown in decades despite the unprecedented economic measures taken by governments around the world.

"People just don't know where the bottom is," said Desmond Tjiang, Hong Kong-based chief investment officer at Fortis Investment Management, which manages $3 billion in Asian equities.

"The macro indicators are still deteriorating, the companies aren't giving any guidance and the governments don't know what they're going to do," Tjiang said. "Basically nobody has any visibility or knows what's going to happen."

Japan's Nikkei 225 stock average lost 151.48 points, or 2 percent, to 7,406.17, and Hong Kong's Hang Seng dropped 321.49, or 2.5 percent, to 12,701.87. South Korea's Kospi shed 3.7 percent to 1,065.80.

Markets in Australia, Singapore, Taiwan and Thailand lost about 1 percent or more.

In mainland China, where markets have rallied this year in response to government stimulus measures, Shanghai's benchmark gained 0.4 percent. Mainland bourses, largely restricted to foreign investors and heavily regulated, often move out of sync with global markets.

As in the U.S., there was little news in Asia to lure buyers.

In Thailand, exports plummeted 26.5 percent in January — their steepest fall in 12 years. It was the latest evidence that Asia's export-driven economies are getting hammered as demand for their cars, cameras and other goods vanishes in the West.

Technology shares were also under pressure after Hewlett Packard Co., the world's top seller of personal computers, posted a 13 percent drop in quarterly profit and slashed its forecast for 2009. South Korea's Hynix, the second-biggest computer-memory chipmaker, lost 4.4 percent.

Overnight in New York, investors unloaded financial heavyweights Bank of America and Citigroup amid concerns that banks will need even more capital to restore their health.

The Dow lost 89.68, or 1.2 percent, to end at 7,465.95, with broader indices slipping as well.

The Standard & Poor's 500 index ended down 9.48, or 1.2 percent, to 778.94. The index finished above its Nov. 20 close of 752.44, which was its worst finish since April 1997.

With U.S. futures lower, Wall Street was poised to drop further. Dow futures fell 62, or 0.8 percent, to 7,400 and S&P500 futures were down 7.8, or 1 percent, to 771.90.

The dollar continued its advance, strengthening to 94.11 yen from 94.06 yen earlier. The euro fell to $1.2614, down from $1.2561

In oil, light, sweet crude sank 79 cents to $38.69 per barrel in Asian trade, reversing strong gains overnight.

The contract jumped Thursday, rising 7 percent, or $2.77, to settle at $40.18 in U.S. trade after a report showed crude stocks were far less than expected. The vast majority of trades have shifted to the April contract with the March contract expiring Friday.

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