VARIOUS: Asia markets tumble amid global stock sell-off following plunge in Wall Street overnight.

A global sell-off that started in China gathers steam in Asian stock markets, but investors, traders and officials express confidence in the markets and Asian economies. Investors dumped Asian shares and emerging market bonds on Wednesday (February 28) as a global sell-off that started in China gathered steam after Wall Street stocks shed more than three percent. In Tokyo, the Nikkei average closed down 2.85 percent, and the broader TOPIX index booked its biggest one-day fall in eight months. The fall in stocks took many in Japan by surprise. "I didn't expect stock prices to tumble this much," a Japanese businessman said as he passed an electronic board displaying stock prices in Tokyo. "Now is a good time to buy stocks," added another businessman. Spooked by a collapse in Chinese stocks and weak U.S. manufacturing data, investors fled to safety, pouring money into less-risky bonds and sending the Dow Jones Industrial Average down in its worst slide in point terms since the aftermath of the September 11, 2001 attacks. Fears of rising volatility in financial markets also prompted investors to unwind risky trades such as the yen carry trade, helping the yen log its biggest daily jump against the dollar in a year on Tuesday (February 27). Japan's government is paying close attention to stock price moves, the top government spokesman said on Wednesday (February 28). "Overall, the Japanese economy continues to be on a sustained economic recovery as robustness in the corporate sector continues. We are closely watching stock price movements in light of increased globalisation of the economy," Chief Cabinet Secretary Yasuhisa Shiozaki told a news conference. Australian shares mirrored the global equity market sell-off, with the benchmark S&P/ASX 200 index falling 2.7 percent. Investors in Sydney were watching Australian Stocks closely, but did not appear to be concerned about the fall. One investor, Chris Holland, said it was natural for the market to have downs but he hoped the Australian stocks didn't fall too far. The Australian treasurer, Peter Costello, said although there was expected to be ramifications generally for markets, the Australian economy was strong enough not to feel any significant effects. "I would expect that following events in China there will be a volatility on equity markets for some time but Australia being one of the strongest performing economies in the world of course is well braced to deal with those shocks which may be coming from overseas," he said. Seoul's KOSPI index also fell 2.6 percent, marking its biggest lost in eight months. South Koreans hoped that the negative effects would not affect their stocks as much, but felt that the situation would improve. Indian shares pulled back from four-month lows after sliding as much as 5 percent early on Wednesday but trimmed early losses, and the BSE index closed down 2 percent -- the lowest since last October. Investors were awaiting India's annual budget to be presented in parliament at 11 a.m. (0530 GMT) for clues. Finance Minister Palaniappan Chidambaram was expected to leave corporate and income tax rates broadly steady in the budget, while seeking to curb inflation pressures without compromising on economic growth. "I think we've seen the Chinese market crash yesterday, and on the queue of the Chinese market the entire south Asian markets have also taken a hit today morning. That was eminent that the Indian markets would take a hit of around 5-6 percent, but we have seen that the markets have gone down by 450 points. Then it has actually recovered. But overall it is in a negative right now," said market analyst Ganesh Shanbagh. Traders said investors were also worried by defeats for the Congress party, which heads the federal coalition, in local elections in two states although the debacle would not destabilise the federal government. ssk/jrc

ITN Source | February 28, 2007

Tags:. .manufacturing. .emerging. .significant. .fell. .budget