Asian, European stocks plunge !

info · Joined: 07 Feb 2005 Posts: 23

Run for your life
-------------------------------

http://news.yahoo.com/s/ap/20070314/ap_on_bi_ge/world_markets

Asian, European stocks plunge By HANS GREIMEL, Associated Press
Writer
35 minutes ago

TOKYO - Asian stocks plunged Wednesday and European shares opened
sharply lower after Wall Street chalked its second-biggest point drop
in four years and rattled already nervous markets worldwide.

The tumble came just as international markets were recovering in
recent days from sharp declines in early March amid concerns about
overvalued stock prices and slower U.S. economic growth.

But those worries resurfaced as troubles at U.S. sub-prime lenders
and lackluster retail sales pushed the Dow Jones industrials down
nearly 2 percent Tuesday, sparking selloffs across Asia.

Stocks in Japan, Hong Kong, Malaysia, India and Australia all fell
more than 2 percent, while shares in Singapore and the Philippines
tumbled at least 3 percent.

In Europe, London's FTSE 100 dropped 1.7 percent shortly after the
open, while Germany's DAX lost 1.8 percent. France's CAC 40 was also
1.7 percent lower.

On the Tokyo Stock Exchange, Asia's biggest bourse, the benchmark
Nikkei 225 index sank 501.95 points, or 2.92 percent, to finish at
16,676.89 points. Foreign investors who bought up stocks during the
recent rally led the selling, traders said.

Hong Kong's Hang Seng index fell 2.6 percent, Indian stocks dropped
3.1 percent, while Philippine stocks plunged 3.4 percent.

Overnight, the Dow fell 242.66, or 1.97 percent, to 12,075.96 amid
concerns about problems at U.S. sub-prime lenders, who provide
mortgages to people with poor credit. The U.S. Commerce
Department also said sales at retailers rose a less-than-expected 0.1
percent in February, suggesting consumer spending might be waning.

"The U.S. sub-prime concern has cast a great shadow on Asia. The
worry is that it could spill over and cause the U.S. economy to slow
down, and this will cause a domino effect on the world economy," said
Lee Cheng Hooi, technical analysis manager at EON Capital in Kuala
Lumpur. "There could be more bloodbath to come."

Still, other analysts maintained that Asia's economic fundamentals
remain strong and that the recent round of declines in stock prices
were more likely a correction to cool markets that had risen too far
too fast over recent months.

"The sell-off is in sympathy with the sharp sell-off we saw overnight
on Wall Street, and it highlights the continued nervousness out
there," said David Cohen, chief of Asian economic forecasting at
Action Economics in Singapore.

"In perspective you could still say that this is a correction after
the strong rally that was experienced for the previous several months
around the world," he said.

While the U.S. retail sales data and mortgage news that prompted the
sell-off on Wall Street "are a little concerning," fundamentals such
as strong U.S. jobs data released Friday were still supportive of
global equities.

"The world economy seems to be remaining on an upward trajectory,"
Cohen said.

The slump reversed a modest recovery in global markets from even
bigger losses that started late last month with a sharp sell-off in
Chinese stocks Feb. 27, which contributed to a 416-point drop in the
Dow later that day.

The Shanghai Composite index fell 2 percent to 2,906.33 Wednesday.
After gaining for six straight sessions the market was primed for a
retreat, analysts said.

"This is the market's own adjustment after gaining for six days,"
said Zhu Haibin, an analyst at Everbright Securities in Shanghai.

In India, jittery investors sold off almost every blue chip stock,
dragging the 30-share Sensitive Index, or Sensex, the benchmark index
of the Bombay Stock Exchange, down more than 3 percent.

Indian shares have seen wild swings each time the global markets have
turned weak. The Sensex fell 43 percent in May-June last year — only
to bounce back to hit record highs. The Sensex reached an all-time
high of 14,643 on Feb. 7, before losing about 2,000 points, or 14
percent, in the latest round of global declines.

Elsewhere Wednesday, Sydney's S&P/ASX 200 fell 2.1 percent,
Singapore's Straits Times benchmark sank 3.35 percent, and
South Korea's Kospi closed 2.0 percent lower.