Open

Coming up

Don't miss

Replay


LATEST SHOWS

DEBATE

Europe's Plan for Putin - Will Russian Leader Bend After New Sanctions? (part 2)

Read more

DEBATE

Europe's Plan for Putin - Will Russian Leader Bend After New Sanctions?

Read more

FOCUS

Pakistan's Ahmadis living in fear of extremist attacks

Read more

WEB NEWS

Web users show solidarity with Iraqi Christians

Read more

THE INTERVIEW

Gilles Kepel, Islamic and Arab world specialist

Read more

BUSINESS DAILY

Argentina braced for another debt default

Read more

DEBATE

Too Late for Sanctions? Pressure Mounts on Russia over Ukraine (part 2)

Read more

DEBATE

Too Late for Sanctions? Pressure Mounts on Russia over Ukraine

Read more

MEDIAWATCH

'What would you do?'

Read more

  • Deadly shelling strikes Gaza UN school

    Read more

  • Dozens killed in stampede at Guinea rap concert

    Read more

  • US and EU slap Russia with fresh sanctions over Ukraine

    Read more

  • 'Compelling' signs Kosovo leaders trafficked organs, prosecutor says

    Read more

  • Graphic: Ebola spreads across West Africa

    Read more

  • Islamists seize key Benghazi army base as fuel fire rages on

    Read more

  • In pictures: ن - a sign of support for Iraq’s persecuted Christians

    Read more

  • Calls mount to ban France’s ‘violent’ Jewish Defence League

    Read more

  • Venezuela: Hugo Chavez’s ‘little bird’ strikes again

    Read more

  • France extradites suspected Jewish Museum shooter to Belgium

    Read more

  • Video: How tourism is helping Rwanda’s gorillas, ex-poachers

    Read more

  • Rare Sri Lankan leopard cubs born in French zoo

    Read more

  • US says Russia violated arms treaty by testing cruise missile

    Read more

  • Karzai’s cousin killed in Afghan suicide attack

    Read more

Asia-pacific

Asian markets fall on historic US credit downgrade

Video by FRANCE 24

Text by News Wires

Latest update : 2011-08-08

Asian stock markets plunged on Monday morning following an unprecedented downgrade of the US government's AAA credit rating to AA-plus by Standard & Poor’s and growing worries over the eurozone debt crisis.

AP - Asian stocks nose-dived Monday as the first-ever downgrade of the U.S. government’s credit rating jolted the global financial system, reinforcing fears of a rapid slowdown in economic growth. Oil prices extended recent sharp losses, trading below $84 a barrel on expectations that weaker global growth will crimp demand for crude. The dollar was lower against the yen and the euro.

Among the major Asian markets, Hong Kong’s Hang Seng tumbled 4 percent to 20,100.20 and South Korea’s Kospi crumpled 6.7 percent to 1,814.100. Japan’s Nikkei 225 stock average dropped 2.5 percent to 9,067.88. Futures pointed to losses on Wall Street when it opens Monday. Dow futures were off 258 points, or 2.3 percent, at 11,144 and broader S&P 500 futures shed 28.8 points, or 2.4 percent, to 1,169.00.

"It’s not Armaggedon, but it feels like it," said Hong Kong-based analyst Francis Lun, adding that he foresees the territory’s Hang Seng index to sink below 19,000 - a decline of a further 5 percent - before making any kind of comeback.

Banking shares were tainted by fears the sector could face heavy losses as the sovereign debt crisis in Europe continued to brew. Industrial and Commercial Bank of China, the world’s biggest bank by market value, fell 4.1 percent. Port operators -- whose lifeblood of imports and exports would be at risk if the global economy goes bust -- were stung badly. Hong Kong-listed China Shipping Container Lines Co. dropped 10.2 percent. Meanwhile, a strengthening yen, which makes Japanese products more expensive when they are sent overseas, slammed the country’s powerhouse export sector. Hitachi Corp. dropped 2.6 percent. Sony was 2.8 percent down. Mazda Motor Corp. lost 3.1 percent.

Standard & Poor’s downgrade of the U.S. sovereign credit rating to AA+ from the top-notch AAA, announced late Friday, was yet another blow to confidence in the struggling U.S. economy. It adds to growing fears that the world’s No. 1 economy may be headed back into recession. Those anxieties have been compounded by signs that Europe’s government debt crisis is threatening to engulf bigger economies such as Italy and Spain.

David Cohen of Action Economics in Singapore said the downgrade Friday did not come as a surprise, given the warnings issued by the agency weeks in advance - but that it may serve as a wake-up call for leaders to take action. "As long as people can calm down quickly enough, it need not become another global financial crisis," Cohen said.

Elsewhere in Asia, Australia’s S&P/ASX 200 index dropped 2.7 percent to 3,996.10. Singapore’s benchmark dived 4.3 percent, Taiwan’s market slid 5 percent and China’s Shanghai Composite shed 3.7 percent. « I think it’s still a matter of people being cautious given they don’t really know how wildly these overseas markets will respond, » Westpac Banking Corp. chief economist Bill Evans told Australian Broadcasting Corp. television.

"I would expect people will take the risk off the table at the moment waiting for some more clarity in those two big issues: how will the U.S. respond to the downgrade and will the Europeans settle down these concerns in Europe?" he said.

Seeking to avert panic spreading across financial markets, finance officials from the Group of Seven industrial countries issued a joint statement late Sunday saying they were committed to taking all necessary measures to support financial stability and growth. The G-7 statement came after the group held an emergency conference call to discuss the debt crisis in Europe and market prospects following the announcement of the first-ever downgrade of the U.S. credit rating.

The European Central Bank, meanwhile, said it will "actively implement" a bond-purchase program that could boost Spanish and Italian bonds and drive down interest yields that threaten those countries with financial disaster. The burst of activity underscored how government debt levels in Europe and the U.S. have unsettled financial markets -- and sharpened fears that debt troubles could derail the global recovery from the 2007-2009 financial crisis.

The Dow fell 5.8 percent last week amid dour U.S. economic news. It plunged 513 points on Thursday alone, the worst day for the Dow since the global financial crisis erupted in 2008.

Benchmark oil for September delivery was down $3.27 to $83.60 a barrel in electronic trading on the New York Mercantile Exchange. Crude rose 25 cents to settle at $86.88 on Friday.

In London, Brent crude was down $2.85 at $106.52 per barrel on the ICE Futures exchange.

In currencies, the dollar weakened to 78.01 yen from 78.34 yen late Friday in New York. The euro rose to $1.4310 from $1.4265.
 

Date created : 2011-08-08

  • UNITED STATES

    S&P downgrades US credit rating from 'AAA' in historic move

    Read more

  • FINANCIAL CRISIS

    Leaders scramble to head off 'black Monday' on markets

    Read more

  • FINANCIAL CRISIS

    Europe closes down amid stock market turmoil

    Read more

COMMENT(S)