Asia Markets - WRAP Asian markets plunge, Nikkei down more than 4 pc, Hang Seng down 5 pc
NAME: ASIA MARKETS 20080206I
TAPE: EF08/0145
IN_TIME: 11:10:38:00
DURATION: 00:02:06:13
SOURCES: AP TELEVISION
DATELINE: Hong Kong/Tokyo - 6 Feb 2008
RESTRICTIONS:
SHOTLIST
Hong Kong
1. Wide of Hong Kong stock exchange
2. Electronic board with stock prices
3. Electronic board reading: "Hang Seng Index 23513.55, -1295.15."
4. Close of electronic board reading: "23513.55, -1295.15."
5. Various of traders
6. Electronic board with stock prices
7. Various of traders
8. Wide of Hong Kong stock exchange
Tokyo, Japan
9. Shot comes into focus of close-up of electronic board at Tokyo Stock Exchange reading "-558.24"
10. Various of electronic board
11. Tilt down from board to Tokyo Stock Exchange trading floor
12. Trader at desk
13. Various of trading floor and traders
STORYLINE:
Asian markets plunged on Wednesday after a steep drop on Wall Street overnight fanned investors' fears the U.S. economy was sliding into a recession that would sap demand for Asian exports.
In Hong Kong, the benchmark Hang Seng index plunged 1,339.24 points, or 5.4 per cent, to close the half-day session at 23,469.46.
Japan's Nikkei 225 tumbled 4.7 per cent to 13,099.24.
Investors were unnerved by economic data on Tuesday showing the US service sector shrank last month for the first time since March 2003.
That seemed to wipe out some nascent optimism about the American economy after the US Federal Reserve's two big rate cuts late last month, which gave many markets a lift.
Pessimism returned when the Institute for Supply Management reported that its December index of activity in the US service sector, which accounts for about two-thirds of the economy there, dropped below 50, indicating contraction.
That sent the Dow Jones industrial average plunging 2.93 per cent, its largest one-day percentage drop since February 27, 2007.
European markets also sank on Tuesday in reaction to the news, with the UK's FTSE 100 Index sliding 2.6 per cent and France's CAC-40 Index falling 4 per cent.
Global financial markets have turbulent since the start of the year, mostly tumbling amid worries about a US, and worldwide, slowdown and massive losses racked up by banks that made bad bets on securities backed by risky mortgages.
Asian investors appeared increasingly anxious about a slump in Europe, another vital export market.
The financial industry, already reeling from losses linked to the credit crisis, was dealt another blow last month when major French bank Societe Generale said it had lost 7.1 (b) billion US dollars in cleaning up unauthorised transactions by a rogue trader.
Elsewhere in Asia, Australia's key index fell 3.2 per cent, while India's Sensex index was down 2.5 per cent.
Thailand's market slid 2.4 per cent.
Some traders said Wednesday's decline in Hong Kong was overdone and largely driven by investors keen to avoid risky exposure during the long Lunar New Year holidays.
Markets in Hong Kong and Singapore were closed on Wednesday afternoon and would remain shut Thursday and Friday.
Markets in China, South Korea and Taiwan were closed Wednesday through Friday for the holidays.
US stock index futures were down modestly, suggesting that Wall Street was poised for further declines.
Dow futures were down 22 points, or 0.2 per cent, to 12,298, while S&P 500 futures were down 1.2 points, or 0.1 per cent, to 1,342.