VARIOUS: Japan stocks tumble almost 5 percent to a new two-year low as indexes in Asian fall on U.S. recession fears

Record ID: 479890

  • Title: VARIOUS: Japan stocks tumble almost 5 percent to a new two-year low as indexes in Asian fall on U.S. recession fears
  • Date: 22nd January 2008
  • Summary: INTERIOR OF CURRENCY DEALING ROOM IN TOKYO FEMALE WORKER SITTING AND WATCHING COMPUTER MONITORS WHICH SHOW CURRENCY RATES JAPAN AND U.S. FLAGS IN FRONT OF ELECTRIC MONITOR MONITOR SHOWING CURRENCY RATE OF 105.85 YEN AGAINST ONE U.S. DOLLAR MEN SITTING AT THEIR DESK AT CURRENCY DEALING ROOM
  • Embargoed: 6th February 2008 12:00
  • Keywords:
  • Topics: Finance
  • Reuters ID: LVA5SCDJ05GFL9DBU6930IJMD2TD
  • Story Text: Japanese stocks tumbled more than 4 percent on Tuesday (January 22), hitting new 2-year lows, as investors followed others around the world in dumping stocks on growing fears the U.S. economy was headed for recession.
    The yen hit a two and half year high against the dollar, sending big exporters such as Toyota and Honda down more than 5 percent. Sony and Canon also tumbled with banks also hit.
    The Nikkei average took its losses to 17 percent so far this year.
    The Nikkei fell as stocks around the world plunged on Monday, and market participants said eyes would be on Wall Street, after it returns from a long weekend on Tuesday.
    U.S. stock index futures sank in holiday-shortened trading in New York on Monday, indicating Wall Street was likely to join the global equity market plunge when trading resumes on Tuesday.
    U.S. President George W. Bush has called for an economic stimulus plan worth up to $150 billion in tax cuts and other measures, but world share markets have plunged on fears it is not enough to stave off a recession in the world's largest economy.
    At 0300 GMT the Nikkei was down 4.4 percent at 12,738.31, below the 13,000 level to its lowest since September 2005.
    In Shanghai, Chinese stocks plunged at the opening on Tuesday because of sliding foreign markets and the prospect of new share supply from a huge offer by China's second biggest life insurer, Ping An Insurance.
    The Shanghai Composite Index fell more than 3 percent by 0320GMT. On Monday the index plunged 5.14 percent, its biggest drop since early July last year.
    Tuesday's drop left the index down 14 percent over the last six trading days, and below important technical support at its November and December lows of 4,778-4,812 points.
    Traders believe any clean break -- a daily close -- below that area could easily send the market to fresh five-month lows below 4,500 points.
    Analysts said the domestic Chinese stock market can no longer be sheltered from slumps in the global market.

    "What we have noticed is that since the start of 2008, markets in the United States and Europe have not been performing well. This has also affected the Hong Kong stock market and the overall Asia-Pacific market. Under such circumstances, it will definitely have a psychological effect on mainland Chinese investors. If the growth in the global economy recedes in 2008, or if it even goes into a recession, and coupled with various regional tensions, this will have a negative impact on the A-share market. This is because the A-share market is increasingly been pushed to be globalised, and there are now more and more links between the domestic and international stock markets," said Qian Qimin (pron: cheeann-chee-min), senior securities analyst at Shanghai Shenyin Wanguo Research and Consulting.
    Meanwhile Australian stocks also dropped 4.7 percent on Tuesday, extending their longest losing streak in a quarter of a century.
    The benchmark S&P/ASX 200 index shed 260 points to 5,318.1by 0300 GMT, its 12th straight session of declines.
    The index is now down more than 20 percent from its life high of 6,851.5 reached in November 2007, indicating a slip into bear market territory.
    A bear market is seen as a long period of falling prices marked by investor pessimism. It is often calculated as having begun when stocks fall 20 percent from whatever peak they have hit during the recent cycle.
    ENDS.
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2011. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register