Asian stock markets tumble on worsening US slump (12:05 p.m.)
HONG KONG — Asian stocks tumbled Monday after the US economy withered at its fastest pace in more than 25 years, heightening doubts that the global economy can recover later this year. Japan’s benchmark dropped more than 3 percent.
As in the US and Europe, investors across the region were shaken after figures Friday showed gross domestic product in the world’s largest economy shrank at a 6.2 percent annual pace at the end of last year.
The decline, worse than most economists had expected, was country’s sharpest since 1982.
Adding to fears that the world economic crisis won’t end anytime soon were more troubling signs that banks may need still more capital to cope with crippling losses.
On Friday, Citigroup Inc. agreed to turn over a huge stake to the US government. And European banking giant HSBC PLC is expected to unveil plans to raise 12 billion pounds ($17 billion) in a new rights issue when it reports results later Monday.
“You’re seeing the US is sinking lower and lower, and we’re still desperately searching for a bottom,” said John Mar, co-head of sales trading at Daiwa Securities SMBC Co. in Hong Kong. “It’s death by a thousand cuts, a slow death right now.”
Every major market in Asia convulsed with selling.
In Japan, the Nikkei 225 stock average dropped 262.60, or 3.5 percent, to 7,305.82.
Hong Kong’s Hang Seng lost 486.31 points, or 3.8 percent, to 12,352.26, and South Korea’s Kospi plummeted 4.4 percent to 1,015.89. Markets in Australia and Singapore shed about 3 percent.
Equities markets in the US and Europe suffered a similar rout on Friday.
In New York, the Dow fell 119.15, or 1.7 percent, to 7,062.93 - its lowest close since May 1, 1997.
The S&P 500 index fell 17.74, or 2.4 percent, to 735.09, and the Nasdaq composite index fell 13.63, or 1 percent, to 1,377.84.
Oil prices weakened in early trade, with benchmark crude for April delivery down 96 cents at $43.80. Last week in the US, the contract fell 46 cents to settle at $44.76 a barrel on the New York Mercantile Exchange. (AP)
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