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SHANGHAI
AND TOKYO—Asian stocks Tuesday plunged, sending the
regional benchmark to its biggest decline since April
1990, on concern the global economy is faltering.
“We’re
in panic territory,’’ said Patrick Chang, who helps
manage $4.5 billion at CIMB-Principal Asset Management
Bhd. in Kuala Lumpur. “The markets are pricing in a
recession. We won’t see a bottom for the next one-to-two
weeks.’’
The MSCI
Asia -Pacific index tumbled 6.6 percent to 132.04 at
3:50 p.m. in
Tokyo,
following Europe into a bear market and extending a
global slump that has wiped more than $5 trillion from
stock markets this year. Standard & Poor’s 500 index
futures point to a 5.3-percent decline when US trading
starts.
Japan’s
Nikkei 225 Stock Average sank 5.7 percent to 12,573.05,
the lowest since September 2005. Australia’s All
Ordinaries Index fell 7.3 percent, the most since
markets crashed globally in October 1989. India’s
Sensitive index plunged 6.9 percent, as trading resumed
after a one-hour halt.
S&P 500
index futures were recently at 1,255.3 in after-hours
trading in Chicago, compared with the index’s close of
1,325.19 on January 18. That would bring the index’s
drop from its October high to 20 percent, a level that
defines a bear market. US markets were closed Monday for
the Martin Luther King public holiday.
Europe’s
Dow Jones Stoxx 600 Index sank 5.7 percent late Monday,
pushing it into a bear market. Asia’s MSCI index is
24-percent below its November high and fell the most
since Japan’s stock market bubble was deflating in April
1990.
“This
has been a crash and it might take a year to get back to
where it was last week,’’ said Michael Birch, who helps
manage the equivalent of $140 million at Wallace Funds
Management in Sydney. “It might be the second half of
the year before people have the confidence to weigh back
in.’’
Crude
oil traded near a five-week low at $88.17 after oil for
February delivery declined 2.1 percent Monday. A measure
of six metals traded on the London Metal Exchange,
including copper and zinc, slid 3.4 percent Monday, the
most in two months. Energy and materials stocks were the
two biggest percentage decliners on the MSCI regional
benchmark.
“The
mood in the market continues to be bearish,’’ said Hans
Kunnen, who helps manage $128 billion at Colonial First
State Global Asset Management in Sydney. He said
investors in Colonial’s funds have been switching from
equities to cash and fixed-interest investments,
declining to be more specific.
The
Korea Exchange briefly suspended program selling orders
on the main Kospi market as well as the junior Kosdaq
market midday because of volatile futures prices.
“The
correction hasn’t finished and will continue until the
optimists have been wiped out,’’ said Taku Yamamoto, who
helps oversee about $107 billion at the Pension Fund
Association in Tokyo.
India’s
Finance Minister P. Chidambaram urged investors to “stay
calm’’ after the Sensex had its biggest fall in almost
16 years. It has now slumped more than 20 percent from
its closing peak on January 8.
“The
bears are now in control,’’ said Jonathan Ravelas, who
helps oversee $3.7 billion at BDO Unibank Inc. in
Manila.
“All good things must come to an end.’’ With reporting
by Patrick Rial and Kazue Somiya in Tokyo, Emma O’Brien
in Wellington, Ian Sayson in Manila and Hanny Wan in
Hong Kong and Berni Moestafa in Jakarta. |
