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Asian markets retreat after rally | Asian markets retreat after rally |
(about 1 hour later) | |
Most Asia stock markets have fallen following two days of dramatic rises. | |
Shares in India, Australia and Hong Kong all fell. However, Japan's Nikkei index reversed early losses to end the day 1% higher. | |
Investors fear that government action to strengthen the financial system will not prevent a worldwide recession. | Investors fear that government action to strengthen the financial system will not prevent a worldwide recession. |
South-east Asian nations plus Japan, China and South Korea have agreed to set up a multi-billion dollar fund to buy banks' bad debt and support banks. | South-east Asian nations plus Japan, China and South Korea have agreed to set up a multi-billion dollar fund to buy banks' bad debt and support banks. |
Australian stocks ended 0.8% lower and Indian shares were down 4.3%, falling below 11,000 points shortly after noon in Mumbai. | |
In Hong Kong, the Hang Seng index was down 4.3% at 16,110.41. | |
However, Japan's Nikkei 225 index ended the day up 1.1% at 9,547.47 points despite falling in earlier trade. On Tuesday, it recorded its biggest ever gain. | |
FROM THE TODAY PROGRAMME More from Today programme | FROM THE TODAY PROGRAMME More from Today programme |
"The rebound is over and the risk of recession as high as ever," said Patrick Shum, strategist with Karl Thomson Securities in Hong Kong. | "The rebound is over and the risk of recession as high as ever," said Patrick Shum, strategist with Karl Thomson Securities in Hong Kong. |
"Governments across the world are cutting welfare spending and issuing more debt to help the financial system. But these measures will create a bigger problem of an economic slowdown." | "Governments across the world are cutting welfare spending and issuing more debt to help the financial system. But these measures will create a bigger problem of an economic slowdown." |
Asian action | Asian action |
The Asian move comes after Europe and US announced a series of steps to recapitalise banks and guarantee bank lending to get credit markets moving again. | The Asian move comes after Europe and US announced a series of steps to recapitalise banks and guarantee bank lending to get credit markets moving again. |
Governments worldwide have pledged around $3 trillion as part of efforts to stem the financial crisis. | Governments worldwide have pledged around $3 trillion as part of efforts to stem the financial crisis. |
Philippines President Gloria Macapagal Arroyo said the World Bank has committed to provide the Asian fund with $10bn | Philippines President Gloria Macapagal Arroyo said the World Bank has committed to provide the Asian fund with $10bn |
She said that the Asian Development Bank and the International Monetary Fund may also contribute to the fund as well as the 10-member Association of Southeast Asian Nations (ASEAN) and China, Japan and South Korea. | She said that the Asian Development Bank and the International Monetary Fund may also contribute to the fund as well as the 10-member Association of Southeast Asian Nations (ASEAN) and China, Japan and South Korea. |
Wall Street nerves | Wall Street nerves |
In New York on Tuesday, Wall Street ended slightly lower at the close of trading as investors took some profits after Monday's big rises in stocks. | In New York on Tuesday, Wall Street ended slightly lower at the close of trading as investors took some profits after Monday's big rises in stocks. |
The Dow Jones index ended the day down 0.82% as investors turned their attention to the worsening economic outlook. Traders say Wall Street is expected to remain nervous in the weeks ahead because of recession worries. | The Dow Jones index ended the day down 0.82% as investors turned their attention to the worsening economic outlook. Traders say Wall Street is expected to remain nervous in the weeks ahead because of recession worries. |
Late on Tuesday the US announced that its budget deficit had reached $455bn, the highest-ever figure. | Late on Tuesday the US announced that its budget deficit had reached $455bn, the highest-ever figure. |
This represents more than 3% of the country's gross domestic product. | This represents more than 3% of the country's gross domestic product. |
Treasury Secretary Henry Paulson said it reflected the problems in the housing market, and slower economic growth. | Treasury Secretary Henry Paulson said it reflected the problems in the housing market, and slower economic growth. |