VARIOUS: Asian markets tumble over a global credit squeeze
- 00:00:17
- ITN Source
VARIOUS: Asian markets tumble over a global credit squeeze
Stock markets in Tokyo, Seoul, Sydney and Hong Kong drop following a global equities sell-of after a French bank halted redemption on funds that invested in U.S. subprime mortgages. Asian stocks tumbled across the board on Friday (August 10), following a rout in global markets as credit jitters flared up after a major French bank froze three funds that invested in U.S. subprime mortgages. France's biggest listed bank, BNP Paribas, froze 2.2 billion U.S. dollars' worth of funds on Thursday (August 9), citing the U.S. subprime mortgage sector woes and causing stock markets in Tokyo, Hong Kong, Seoul and Sydney to sink. Tokyo's Nikkei average fell more than two percent to its lowest close in almost five months, causing selling to spread across the board, with the benchmark now down more than 8 percent from this year's peak marked in late February. Both the Nikkei and the broader TOPIX index tumbled 3 percent during the session but pared some losses by the close. The Nikkei ended the day down 406.51 points or 2.37 percent at 16,764.09, the lowest close since March 16. On Friday, the Bank of Japan conducted a fund injection at its regular money market operation due to a slight rise in the benchmark overnight call rate. "There is talk that the various national central banks are acting to relieve the credit crunch. I have heard today that the Bank of Japan injected 1 trillion yen (8.45 billion U.S. dollars (USD) in funds on a same-day basis money market operation after monitoring the markets," Chief Cabinet Secretary Yasuhisa Shiozaki told a news conference. The European Central Bank injected a record 130.6 billion U.S. dollars into Europe's money markets to prevent a financial system seizure on Thursday. Hong Kong stocks also fell 2.9 percent, causing a heavy turnover, but brokers said selling was orderly. CFC Seymour currency analyst Steve Rowles shrugged off fears churned up due to the fall in markets, saying that the fundamentals in China's markets were still strong, "I think long term we will continue to focus on the fundamentals, so the subprime issue will be resolved," he said. The benchmark Hang Seng Index ended at 21,792.71, having earlier hit levels not seen since June 27. Seoul shares had their biggest fall in three years on Friday, hitting a five-week closing low. The main KOSPI ended a turbulent week down 2.6 percent, and had now fallen 9.3 percent since hitting an all-time high of 2,015.48 points on July 26 -- wiping out 72 billion USD off its market value. The benchmark Korea Composite Stock Price Index (KOSPI)) fell 4.2 percent to 1,828.49 points, its lowest close since July 3 and marking its biggest daily percentage fall since May 17, 2004. Australian shares also skidded 3.7 percent in the biggest one-day percentage drop in nearly six years. Yet Australian treasurer Peter Costello said the crisis would not have a major affect on Australian markets. The benchmark S&P/ASX 200 index dropped 229.6 points to 5,936.0, based on the latest available data. Macquarie Bank Ltd., which last week warned that investors in two debt funds could potentially face losses of up to 25 percent, slumped 7.1 percent to A$72.05.
ITN Source | August 9, 2007
