Asian Markets Slump for Second Day
Asian markets fell for a second straight day Friday and the dollar rose amid growing fears that the global economy is on the verge of slipping back into recession.
However, most markets were off their earlier lows after G20 finance chiefs meeting in Washington promised to take collective action to stabilize the financial system.
Seoul slumped 5.73 percent, or 103.11 points, to 1,697.44, while Hong Kong gave up 1.32 percent, or 236.70 points, to end at 17,675.25.
Sydney closed 1.56 percent, or 61.7 points, lower at 3,903.2. However, the market was off its earlier lows and at one point even edged into positive territory.
Taiwan fell 3.55 percent, or 259.28 points, to 7.046.22 while Shanghai lost 0.41 percent, or 9.90 points, to finish at 2,433.16.
Bangkok, which at one point dived five percent, was 4.33 percent lower in the afternoon. Mumbai was almost two percent lower in morning trade.
However, Jakarta rose 1.70 percent, or 57.20 points, to 3,426.34, a day after losing almost a tenth of its value because of a huge outflow of foreign cash.
Tokyo was closed for a public holiday.
The Asian sell-off followed heavy losses in the United States and Europe, which were caused by the Federal Reserve's comments on Wednesday that the U.S. economy faced "significant downside risks", with the economy struggling with slow growth, high unemployment and a depressed housing market.
The warning came after the Fed announced a $400 billion plan to boost the economy that would see it shift its shorter-term debt portfolio to longer-term bonds in a bid to lower long-term interest rates, a move that disappointed markets.
On Wall Street the Dow slumped 3.51 percent -- marking its worst two-day fall since November 2008 -- the S&P 500 sank 3.19 percent and the tech-heavy Nasdaq Composite shed 3.25 percent.
The Fed's forecast piled the pressure on already nervous investors, who were selling assets earlier in the week amid fears Greece was on the verge of default, which could spread to other economies and lead to another global financial crisis.
"The selloff in risk assets threatens to become disorderly," Tim Condon, economist at ING, told Dow Jones Newswires.
The dollar extended its rise against regional currencies as dealers shifted their attention away from riskier assets.
The Australian dollar was at $1.0024 from $1.0017 late Thursday after falling to as low as 98.02 U.S. cents. The Aussie hit a record high above $1.10 just two months ago.
The greenback, which in recent months was languishing near record lows against several Asian currencies, was up at Sg$1.2962 from Sg$1.2878 and to Tw$30.35 from Tw$30.34. However, it edged down to 1,165.00 South Korean won from 1,179.57 amid reports the Korean central bank had stepped into the markets.
The euro edged up to $1.3524, from $1.3464 late Thursday in New York, while it was also at 103.13 yen, from 102.64.
The dollar fetched 76.27 yen, from 76.25 yen.
In a bid to ease global turmoil the Group of 20 major economies pledged late Thursday to mount a powerful response to the rising challenges facing the world economy.
The G20 finance ministers and central bankers vowed in an unexpected joint statement to deliver "a strong and coordinated international response to address the renewed challenges facing the global economy."
The finance chiefs noted "heightened downside risks from sovereign stresses, financial system fragility, market turbulence, weak economic growth and unacceptably high unemployment."
On oil markets New York's main contract, West Texas Intermediate light sweet crude for November delivery, was up 89 cents to $81.40 in afternoon trade, bouncing back from a massive 6.3 percent, or more than five-dollar, fall in the U.S. session Thursday.
Brent North Sea crude for November settlement was up $1.42 to $106.91, but the gains were narrower. The contract plunged $4.87 overnight.
Gold fetched $1,734.86 an ounce by 0900 GMT, down from the $1,765.40 it was at by 0900 GMT Thursday.
In other markets:
-- Singapore fell 0.80 percent, or 21.73 points, to 2,698.80.
-- Manila slumped 5.13 percent, or 210.14 points, to end at 3,885.96.
The fall -- the worst in a single day since October 2008, at the beginning of the financial crisis -- sent the index to a seven-month low as foreign investors pulled out.
"Fund managers are liquidating their positions because of global economic concerns," said April Lee-Tan, research head at CitisecOnline.com.
"It's sentiment-driven... panic-selling."
Top-traded Lepanto Consolidated Mining plunged 10.08 percent to 1.16 pesos, Philippine Long Distance Telephone dived 3.93 percent to 2,150 pesos and Metropolitan Bank lost 8.62 percent to close at 62.05 pesos.
-- Wellington closed 0.89 percent, or 25.58 points, lower at 3,282.71.
Fletcher Building fell 2.2 percent to NZ$7.29 and Port of Tauranga shed 1.3 percent to end at NZ$9.40.
-- Kuala Lumpur fell 1.58 percent, or 21.87 points, to 1,365.94.
Hong Leong Financial lost 8.0 percent to 10.06 ringgit, while shipping company MISC fell 5.3 percent to 6.12 ringgit.
-- Bangkok dived 3.27 percent, or 32.43 points, to 958.16.
Banpu slid 18.00 baht to 586.00 baht and PTT Plc dropped 12.00 baht to 290.00 baht.
-- Indian shares fell 1.22 percent, or 199.09 points, to 16,162.06 and the rupee slid to a 28-month low against the dollar.
The currency slipped to 50 rupees against the dollar briefly, a level last seen in May 2009, before recovering to 49.09 after suspected central bank intervention.
India's leading vehicle maker Tata Motors fell 4.81 percent to 148.4 rupees amid media reports that the firm, like other auto makers, is cutting production due to slowing demand in the ongoing Indian festive season.
Private aluminum producer Hindalco retreated 3.77 percent to 134.15 while engineering giant Larsen and Toubro ended down 2.7 percent to 1,452.25.