Russia, Indonesia Halted; Japan Plunges 9%

123jump.com Staff
08 Oct, 2008
New York City

Asian and emerging markets plunge. Japan dropped the most since 1987. Indonesia halted after 10% fall. Russia drops 11% and closed exchanges till Oct 10. India with 3% loss is down 50% for the year. Hong Kong plunges 8.2% and cut rates. Australia declines 5%.

[R]10:00 AM – New York – Asian markets plunge on the continued weakness in the U.S. financial markets. Russia Suspends trading till October 10 and Indonesia halted trading for the day. Japan plunged the most in 21 years.[/R]

Asian markets plunge tracking losses in the U.S. markets.

Banks in Japan dropped as investors worry that more capital injection will be needed as losses linked to the U.S. mortgage securities keep mounting. Mitsubishi UFJ Financial 6% and financial brokerages declined. Toyota and Honda dropped more than 10% after Nikkei newspaper said that operating profit may drop as much as 40%.

The International Monetary Fund raised its estimates of loan losses linked to U.S. mortgage securities. The bank raised estimate to $1.4 trillion from $1.3 trillion and lowered its global economic growth to 3% from 3.7%.

The Nikkei 225 index dropped 9.4%, the single largest day decline in 21 years. Hang Seng index in Hong Kong declined 8.2% despite a rate cut by the monetary authority. In Jakarta, Indonesia stock market trading was halted after JCI index dropped 10%. The index dropped 10% for the second time this week.

The Federal Reserve in coordination with central banks in Europe, UK, Canada, Sweden and Switzerland lowered key lending rate to improve liquidity in the credit markets around the world. Interbank lending rates are still hovering near the peak.

Separately, UK plans to inject as much as $87 billion into banking system.

Sensex index in Mumbai trading plunged 3% and the index has fallen nearly 50% for the year. Worries related to higher inflation, weak rupee and a potential fall in exports to the U.S. unnerved the market.

In Russia, RTS Index plunged 11% and in Turkey ISE National 100 index at the end of the first session dropped 5.6%. Russia halted trading on two exchanges till October 10 as markets continue to slide in the week. RTS trading system was halted indefinitely and Micex trading is suspended till October 10. President Dmitry Medvedev offered to inject 950 billion rubles or $36 billion of credit support today. Micex dropped 14%, just before suspension at 11:00AM Moscow time.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 952.58 or 9.38% to 9,203.32, Hang Seng index in Hong Kong decreased 1372.03 or 8.17% closed to 15,431.73. CSI 300 index in China lower 79.57 or 3.78% closed to 2,022.88. ASX 200 index in Australia decreased 230.60 or 4.99% to close 4,388.10. The KL Composite index in Malaysia lower 27.04 or 2.71% closed to 970.19.

The Kospi Index in South Korea decreased 79.41 or 5.81% to close at 1,286.69, SET index in Thailand closed lower 36.37 or 6.88% to 492.34, and JSE Index in Indonesia decreased 168.05 or 10.38% to 1,451.67. The Sensex index in India decreased 366.88 or 3.14% closed to 11,328.36.

Europe Markets Review

In London FTSE 100 Index traded lower 54.40 or 1.18% to 4,550.80, in Paris CAC 40 Index increased 3.53 or 0.09% to 3,735.75 and in Frankfurt DAX index traded lower 42.25 or 0.79% to 5,284.38. In Zurich trading SMI decreased 68.74 or 1.07% to 6,359.02.