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Asia share panic after Dow plunge | |
(40 minutes later) | |
Asian markets have opened heavily down in the wake of a plunge by US stocks to their lowest level for five years. | Asian markets have opened heavily down in the wake of a plunge by US stocks to their lowest level for five years. |
Tokyo's Nikkei-225 index has dropped 10%, while South Korea, Australia, Singapore and Hong Kong all crashed 7% as soon as the markets opened. | |
Despite concerted government action, investors are fearful the financial crisis will prompt a global recession. | Despite concerted government action, investors are fearful the financial crisis will prompt a global recession. |
Finance ministers from the G7 leading industrial countries are set to meet in Washington to discuss the crisis. | Finance ministers from the G7 leading industrial countries are set to meet in Washington to discuss the crisis. |
US President George W Bush is due to make an address to the American people later in the day. | US President George W Bush is due to make an address to the American people later in the day. |
'Deeper panic' | |
Heavy falls were seen across Asia's markets as a climate of fear took hold on Friday. Selling is unstoppable in New York and Tokyo. Investors were gripped by fear Yutaka MiuraShinko Securities | |
As the plummeting Nikkei-225 index faced its biggest one-day drop since Tokyo's 1987 crash, the global crisis claimed its first Japanese financial institution, with the insurance company Yamato Life going bankrupt. | |
"Selling is unstoppable in New York and Tokyo," said Yutaka Miura, senior strategist at Shinko Securities in Tokyo. | |
"Investors were gripped by fear," he told the Associated Press. | |
Hong Kong's benchmark Hang Seng index slumped to a three-year low, while in the Philippines, share prices closed down more 8.3%. Shanghai's index was down 3.8%. | |
In Indonesia, meanwhile, stock market trading has been suspended indefinitely in order to prevent what the president of the exchange called "deeper panic". | |
With the value of gold continuing to rise as investors seek security, oil fell below $83 a barrel to a 12-month low. | |
'Beyond fundamentals' | 'Beyond fundamentals' |
As well as the G7 meeting, talks will be held at the International Monetary Fund (IMF) in Washington. | |
The organisation's chief, Dominique Strauss-Khan, said on Thursday the lending procedure would allow the IMF to react quickly to support countries facing funding problems. | The organisation's chief, Dominique Strauss-Khan, said on Thursday the lending procedure would allow the IMF to react quickly to support countries facing funding problems. |
The IMF has warned the financial crisis is the most dangerous since the 1930s | |
Mr Strauss-Kahn said the world was "on the cusp of recession", but could still recover. | Mr Strauss-Kahn said the world was "on the cusp of recession", but could still recover. |
After a gloomy day's trading in Europe on Thursday, the Dow Jones - the US benchmark index - ended down 7.3% - tumbling below 9,000 points for the first time since August 2003. | |
"We're way beyond fundamentals," said Chris Orndorff, head of equity strategy at Payden & Rygel, in Los Angeles. | |
"This is just pure panic, that's all it is." | |
Iceland mission | Iceland mission |
The IMF scheme, which was used during the Asian financial crisis in 1997, would help speed up approval of loans. | The IMF scheme, which was used during the Asian financial crisis in 1997, would help speed up approval of loans. |
The body has already sent a mission to Iceland, where the government has taken control of its three biggest banks. | The body has already sent a mission to Iceland, where the government has taken control of its three biggest banks. |
There is no domestic solution to a crisis like this one Dominique Strauss-Kahn, IMF managing director Time to reform the IMF?'Major global downturn' says IMFStocks falter as fears persist | There is no domestic solution to a crisis like this one Dominique Strauss-Kahn, IMF managing director Time to reform the IMF?'Major global downturn' says IMFStocks falter as fears persist |
Speaking ahead of meetings of the IMF and World Bank, Mr Strauss-Khan urged countries to act "quickly, forcefully, and co-operatively" to solve the global economic problems. | Speaking ahead of meetings of the IMF and World Bank, Mr Strauss-Khan urged countries to act "quickly, forcefully, and co-operatively" to solve the global economic problems. |
A day after seven central banks around the world cut interest rates in an effort to calm financial markets, the IMF chief said further co-ordinated action was necessary. | A day after seven central banks around the world cut interest rates in an effort to calm financial markets, the IMF chief said further co-ordinated action was necessary. |
"All kinds of policy co-operation are to be commended," he said. | "All kinds of policy co-operation are to be commended," he said. |
But he issued a stark warning against countries acting unilaterally to fight the crisis, referring to recent isolated moves by certain European Union member countries. | But he issued a stark warning against countries acting unilaterally to fight the crisis, referring to recent isolated moves by certain European Union member countries. |
"There is no domestic solution to a crisis like this one." | "There is no domestic solution to a crisis like this one." |
Finance ministers from the G7 group of wealthy nations are to meet in Washington this weekend. | Finance ministers from the G7 group of wealthy nations are to meet in Washington this weekend. |