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World markets slump; Nikkei at 26-year low
(Agencies)
Updated: 2008-10-27 19:47 Economic data this week is likely to further stoke concerns about the global economy. Earlier Monday, the well-respected Ifo Institute in Germany reported that its main activity index fell to a five-year low 90.2 in October. Monday's sharp stock market declines came amid another round of government measures to boost markets. In South Korea, the central bank slashed its key interest rate Monday by three-quarters of a percentage point - its biggest cut ever - to prevent Asia's fourth-largest economy from lurching into recession. And Australian and Hong Kong central bankers injected funds into their markets to ensure liquidity. In Europe, the International Monetary Fund said Sunday it had reached a tentative agreement to provide Ukraine with US$16.5 billion in loans and announced that emergency assistance for Hungary had cleared a key hurdle. Only South Korea's market managed to eke out gains, perhaps in part because of the big rate cut there. The benchmark Kospi ended 0.8 percent higher at 946.45. In Chinese mainland, the benchmark index slumped to its lowest level in more than two years as investors reacted to dismal earnings reports. The Shanghai Composite Index lost 6.3 percent, or 116.27 points, to 1,723.35. It is now down about 72 percent from its peak about a year ago. In the Philippines, the key index plummeted 12.3 percent to 1,713.83 points, triggering a circuit-breaker that automatically halted trading for 15 minutes. The biggest one-day drop since February 2007 was caused by "big fund players" withdrawing investments to get cash and meet redemptions at home, traders said. In Japan, stocks fell despite a report that the government was considering massive capital injection into struggling banks in a bid to calm jittery financial markets. "The reported plan by the government hardly cheered investors. What the market really wants is a package of stimulus measures to boost the Japanese economy," said Kazuki Miyazawa, market analyst at Daiwa Securities SMBC Co. Ltd. Citing unidentified sources, the Yomiuri newspaper said Monday the government is considering injecting public money worth 10 trillion yen (US$108 billion) into struggling banks in a bid to stabilize the financial market hit by sagging stocks and a soaring yen. In oil, crude prices weakened after OPEC's move to cut production in an attempt to halt the declines. Light, sweet crude for December delivery was down US$2.24 to US$61.91 a barrel. Oil prices have plunged more than 57 percent from a record US$147.27 in mid-July. |
