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Black Friday for Asian, European markets
By Dong Zhixin (chinadaily.com.cn)
Updated: 2008-10-10 15:10 An overnight carnage on Wall Street sparked another round of massive stock sell-off in Asia and Europe, sending key indices in Japan, Britain and Germany down as much as 10 percent.
Asian and European investors awoke to news that the Dow Jones Industrial Average in the United States dived 679 points Thursday to extend its losses so far this week to an awesome 17 percent. The steep losses spooked equity holders, who in a knee-jerk reaction, jumped on a selling-spree at the opening bell. Within minutes of trading, Japan's benchmark Nikkei 225 stock average fell more than 10 percent, Korean stocks dropped 9 percent and the Hang Seng Index of Hong Kong declined more than 7 percent. Several hours later in Europe, the FTSE 100 Index of England and Germany's DAX index fell as much as 10.2 percent shortly after trading started, while France's CAC 40 index witnessed the biggest fall since 1987, diving 9 percent. The Shanghai market fared better, but sell-off pressure was heavy. The benchmark Shanghai Composite Index opened 3.8 percent lower at 1,995.96 points, breaching the psychologically important level of 2,000 points, which was significant to both regulators and investors. Two days after the mark was broken through last time, the State Council cut stock trading tax and promise share buybacks, sparking a huge rally. The Shanghai gauge ended the day marginally above 2,000 points at 2,000.57, a loss of 3.57 percent over the previous close. The Nikkei 225 closed 9.62 percent lower, after plunging as much as 11 percent as a point. Hong Kong's HSI index was down 7.95 percent when the closing bell sounded. Chinese investors seemed to get little comfort from another effort by the China Securities Regulatory Commission (CSRC) to prop up confidence. The CSRC announced Thursday that listed firms must pay dividends in cash totaling no less than 30 percent of its distributed profits over the previous three years before submitting their refinancing applications. The new measure could help encourage long-term investment and reduce market volatility, the CSRC said. Lack of cash dividends was blamed as one of the key culprits for high volatility in China's stock markets, where five-percent or more daily ups and downs are commonplace, as investors can only bank on share prices gains. While beneficial to the long-term good of the stock market, the measure failed to address the immediate concerns of the crisis-preoccupied investors. Investors feared the escalating financial crisis may prolong the economic difficulties of the US and Europe, two key export destinations for both China and other Asian economies. In Other Developments Wall Street plunging into pit of despair
A runaway train of a sell-off turned the anniversary of the US stock market peak into one of the worst days in Wall Street history Thursday, driving the Dow Jones industrials down a breathtaking 679 points and deepening a financial crisis that has defied all efforts to stop it.
Light, sweet crude for November delivery was down US$4.35 to US$82.24 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore, the lowest since October 2007. The contract overnight fell US$1.81 to settle at US$86.62. [Full Text] Japanese insurer files for bankruptcy protection
The Tokyo-based insurer has thus become the first Japanese financial institution to collapse amid the global financial turbulence characterized by major stock market crashes worldwide. The Tokyo-based company will take necessary legal steps based on insurance law and will seek approval for rehabilitation, the news agency and other media said, quoting informed sources. [Full Text] GM shares drop to 58-year low, global risks eyed
General Motors Corp shares plunged to their lowest level since 1950 on Thursday as concerns mounted that an industry decline that started in the United States was spreading and a leading forecaster warned global auto demand could "collapse" in 2009. GM shares fell as much as 33 percent to $4.65, driving its market capitalization to its lowest level since 1929, according to California-based Global Financial Data. The stock closed down 31.11 percent at $4.76 on the New York Stock Exchange. [Full Text] Indonesian stock trading frozen to prevent panic
Indonesian authorities planned to reopen the market Friday morning after a suspension was imposed Wednesday. But a last-minute change of plan has been announced after Asian stocks tumbled Friday morning amid fears of a global economic downturn. [Full Text] Iceland suspends stock trading, creates new bank
The Nordic nation's government also used sweeping new emergency powers to create a new bank that will take over the bulk of the domestic operations of another one of its collapsed banks. [Full Text]
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