TOKYO - GLOOM returned to Asian markets on Tuesday as investors dumped stocks following huge overnight losses on Wall Street and dismal economic data out of the US, a crucial export market.
Japan's Nikkei 225 stock average tumbled 533.53 points, or 6.4 per cent, to 7,863.69, and Hong Kong's Hang Seng index lost 5 per cent to 13,401.73.
Global markets had rallied last week, but any nascent investor confidence quickly wilted after grim US economic data sent the Dow Jones industrial average plummeting nearly 700 points - or 7.7 per cent - on Monday, wiping out more than half of last week's big gains.
'A string of weak economic data really depressed sentiment,' said Yutaka Miura, a senior strategist at Shinko Securities in Tokyo. 'Investors are becoming more pessimistic over the state of the global economy.'
Australia's central bank slashed its key interest rate Monday a full percentage point to 4.25 per cent as it tries to prevent the economy from sliding into recession. But investors took scant comfort from the move, and the benchmark S&P/ASX 200 index fell 4.2 per cent at 3,528.2.
While markets in mainland China and Singapore edged up, key indices in the Philippines, Taiwan, India and South Korea dropped sharply.
'This was brought by the confirmation of recession in the U.S.,' said Emmanuel Soller, a trader at Equitiworld Securities in Manila.
US stocks first slid on initial reports that the first weekend of the holiday shopping season, while better than some retailers and analysts feared, saw only modest gains. Downbeat reports on the manufacturing sector and construction spending further unnerved investors.
Then the National Bureau of Economic Research, considered the arbiter of when the economy is in recession or expanding, said the US recession had begun a year ago, in December 2007. By one benchmark, a recession occurs whenever the gross domestic product, the total output of goods and services, declines for two consecutive quarters. But the NBER's dating committee uses broader and more precise measures, including employment data.
The problems facing the US manufacturing sector were reflected in similar surveys earlier for the euro-zone and Britain. European shares also fell sharply on Monday.
US stock index futures were up modestly, suggesting Wall Street would bounce back on Tuesday. Dow futures were up 33 points, or 0.4 per cent, to 8,172, while S&P 500 futures were up 2.3 points, or 0.3 per cent, to 818.1.
The bleak outlook for the US economy drove oil prices fell below US$48 (S$73) a barrel in Asian electronic trading. Light, sweet crude for January delivery was down US$1.53 to US$47.75 a barrel in electronic trading on the New York Mercantile Exchange by mid-afternoon in Singapore.
KUALA LUMPUR Malaysian shares closed 0.3 per cent lower Tuesday on steep declines on Wall Street and weaker regional markets, dealers said.
The Kuala Lumpur Composite Index shed 2.68 points to end the day at 845.75.
SHANGHAI Chinese shares closed down 0.26 per cent on Tuesday following an overnight fall on Wall Street and worries over a further decline in China's economy, dealers said.
The benchmark Shanghai Composite Index, which covers A and B shares, closed down 4.98 points at 1,889.64 on turnover of 67.6 billion yuan (S$15.1 billion ).
The Shanghai A-share index lost 5.27 points, or 0.26 per cent, to 1,984.41 on turnover of 67.3 billion yuan, but the Shenzhen A-share index was up 8.31 points, or 1.42 per cent, to 591.66 on turnover of 35.9 billion yuan.
HONG KONG Hong Kong share prices closed 5.0 per cent lower on Tuesday, as markets across the world were dragged down by confirmation the United States was in recession, dealers said.
The benchmark Hang Seng Index closed down 702.99 points at 13,405.85. Turnover was light at HK$38.50 billion (S$7.5 billion).
TOKYO Japan's Nikkei stock index plunged 6.35 per cent by the close of trade on Tuesday, hammered by heavy losses overnight on Wall Street after official confirmation that the United States is in recession.
The Nikkei sank 533.53 points to 7,863.69. -- AP, AFP, BENAMA
