Open

Coming up

Don't miss

Replay


LATEST SHOWS

IN THE PAPERS

'Requiem for a recorder'

Read more

DEBATE

Pakistan's Political Turmoil: Can Imran Khan's PTI Party Depose the Government?

Read more

DEBATE

Pakistan's Political Turmoil: Can Imran Khan's PTI Party Depose the Government? (part 2)

Read more

DEBATE

Racism, riots and police violence: USA under scrutiny

Read more

IN THE PAPERS

"The pen is mightier than the sword"

Read more

FOCUS

Israel's minorities and military service

Read more

BUSINESS DAILY

Russia targets McDonald's over tensions with West

Read more

AFRICA NEWS

Ebola: Liberian authorities admit 17 patients are missing

Read more

MEDIAWATCH

'New York Post' slammed for publishing Foley execution images

Read more

  • Special report: Supplying Ukraine’s soldiers on the front line

    Read more

  • Israeli air strike kills three top Hamas commanders

    Read more

  • Former Femen activist detained after fighting veiled woman

    Read more

  • US forces tried to rescue slain reporter from IS captors

    Read more

  • Interactive: Relive the Liberation of Paris in WWII

    Read more

  • Former Irish PM Albert Reynolds dies at 81

    Read more

  • Tensions high in Yemen as Shiite rebel deadline looms

    Read more

  • Thailand coup leader Prayuth Chan-ocha voted prime minister

    Read more

  • Deadly street battles hit Ukrainian rebel stronghold

    Read more

  • US attorney general visits Missouri town after fatal shooting

    Read more

  • French village rallies behind besieged elderly British couple

    Read more

  • Brazil’s Silva launches bid after Campos plane crash death

    Read more

  • Netanyahu compares Hamas to IS, Gaza offensive to continue

    Read more

  • Brutal IS beheading video sparks social media pushback

    Read more

  • France’s ex-PM Juppé sets up presidential clash with Sarkozy

    Read more

Asian stocks plummet as US confirms recession

Latest update : 2008-12-02

Asian equities slid on Tuesday after signs of a deepening global economic slump slammed stocks worldwide the previous day, driving benchmark US Treasury yields to their lowest since the 1950s.

AFP - Japan and Australia announced new measures to try to ease the global credit crisis Tuesday after the United States formally announced it was in recession, sparking a massive worldwide stock sell-off.
   
Tokyo shares plunged 6.35 percent and Sydney dropped 4.2 percent following the fourth-biggest point loss in history for the US Dow Jones Industrial Average, which plummeted 7.7 percent overnight.
   
Although markets had assumed a recession was already in place, analysts said, the formal confirmation deepened investor gloom in the face of the worst financial crisis since the Great Depression.
   
In response, Australia's central bank slashed interest rates by 100 basis points -- a larger cut than expected that dropped the official cash rate to 4.25 percent, its lowest level in more than six years.
   
"Financial market sentiment remains fragile, as evidence accumulates of weak economic conditions in the major countries and a significant slowing in many emerging countries," bank governor Glenn Stevens said.
   
Japan's central bank meanwhile outlined new measures to make it easier for commercial banks to borrow money using corporate debt as collateral, hoping to free up frozen credit channels at the heart of the current crisis.
   
"Financial conditions in Japan have become less accommodative on the whole, as the financial positions of small firms have deteriorated and an increasing number of large firms have faced a worsening in funding conditions," it said.
   
The bank announced similar measures in November 1998 after a number of banks collapsed under mountains of bad debt.
   
Major banks around the world have collapsed or been taken over during the current crisis, which is rooted in so-called subprime loans in the United States -- mortgages and credit extended to underqualified consumers.
   
Those loans were repackaged and sold to banks and investors around the world. As the economy slowed and housing prices declined, defaults on those loans mounted, sending shock waves through the global financial system.
   
The defaults have made banks wary -- or sometimes incapable -- of widespread lending essential to the system's smooth functioning, and central banks and governments have taken various steps to try to get credit flowing again.
   
The Wall Street Journal reported that US Treasury Secretary Henry Paulson, who has come under fire for his handling of the crisis, would announce a new programme later Tuesday to make credit more easily available.
   
The lending facility, operated by the Federal Reserve, will "increase the availability of auto loans, student loans and credit cards," the paper said, funded in part by the 700 billion dollar bailout plan approved by Congress.
   
The plan was initially focussed on buying up the bad mortgage-related assets, but Paulson shocked markets last month by switching strategy to focus on capital injections for struggling banks.
   
World stock markets have been battered during the crisis and slowdown, and Asian markets to another beating on Tuesday.
   
While Japan and Sydney tumbled Tuesday Hong Kong was down 4.9 percent after the morning session.
   
Australia's interest rate cut "didn't do anything to boost the market, which actually fell further into the red from where we were" said Juliette Saly, an analyst at Australian brokerage CommSec.
   
The Nikkei has lost 48 percent this year, Sydney is down 44 percent, Hong Kong is off about 52 percent and the Dow Jones has lost nearly 39 percent.
   
News in Europe has been equally grim.
   
Fresh data released on Monday showed German retail sales fell 1.6 percent in October from the previous month, while in France a closely watched index of manufacturing activity fell to 37.3 in November, its worst-ever reading.
   
Frankfurt's DAX and the CAC 40 in Paris have both dropped 45 percent this year, while London's FTSE 100 is down 37 percent.

Date created : 2008-12-02

COMMENT(S)