Asia's main stock markets plummeted Tuesday, with Hong Kong, Tokyo, Shanghai and Taipei stocks down around 5 percent, as part of the reaction to the latest U.S. financial crisis triggered by the collapse of investment bank Lehman Brothers.
After Lehman Brothers filed for bankruptcy and Merrill Lynch agreed to be taken over by Bank of America, the Dow Jones Industrial Average tumbled 4.42 percent, the steepest drop since the Sept. 11, 2001 attacks.
Tokyo stocks nosedived 605.04 points on Tuesday, or 4.95 percent, to 11,609.72 points, its lowest closing level in more than three years.
Japan's central bank injected 2.5 trillion yen on Tuesday into money markets to ease the impact of the failure of the Lehman Brothers.
But Japan's Finance Minister Bunmei Ibuki reassured investors that the Lehman bankruptcy will not seriously damage the Japanese financial system.
"Considering the conditions of each financial institution's self-owned capital, we do not have to worry about the Japanese financial system," Ibuki said at a press conference.
Hong Kong's blue-chip Hang Seng Index also shed 5.4 percent to 18,300.61 on Tuesday, its lowest point in nearly two years.
Turnover rose to 88.42 billion HK dollars from last Friday's 57.77 billion HK dollars .
"Today was a bloodbath," said Alex Tang, head of research at Core Pacific-Yamaichi, who noted that trading volume was its highest in months. "This was panic selling ... they just want to liquidate their positions."
Phillip Capital Management strategist Y.K. Chan said 18,000 is the key support line for Hang Seng Index in the near term. But he added "we're in the middle of a crisis, so valuation offers little comfort."
Taiwan's stock market tumbled 4.89 percent, falling below the key 6,000 level for the first time since November 2005. The situation is similar in Shanghai's stock markets where the benchmark Shanghai Composite Index lost 93.03 points, or 4.47 percent, sinking below the 2,000-point mark to close at 1,986.64.
Qin Xiaobin, an analyst with the Beijing-based Yinhe Securities, also attributed the plunge to the lending interest rate cut announced by the Chinese central bank and investors' lingering concern over the country's economy.
On Monday, the People's Bank of China's announced the benchmark interest rate for one-year yuan-denominated loans would be lowered 0.27 percentage point on Tuesday, its first cut since October 2004.
The benchmark Korea Composite Stock Price Index slashed90.17 points, or 6.1 percent, at an 18-month low of 1,387.75 on Tuesday.
"We are closely monitoring the financial markets and will take appropriate steps to stabilize markets if necessary. We will study measures to ease excessive volatility in the foreign exchange rates." South Korea's Vice Financial Minister Kim Dong-Soo told reporters on Tuesday.
Other Asian-Pacific stock markets also experienced severe plunges as the fallout from U.S. financial market turmoil continued.
Philippine shares plunged more than 4 percent for the second straight day. The Philippine Stock Exchange's 30-share composite index lost 114.44 points, or 4.51 per cent, to close at 2,421.72 from Monday's finish of 2,536.16.
The benchmark S&P/ASX200 index in Australia was down 66.9 points, or 1.39 percent at 4750.8, while the broader All Ordinaries lost 75.2 points, or 1.54 percent to 4799.8.
The shares prices in Singapore ended lower on Tuesday with the benchmark Straits Times Index down 25.12 points or 1.01 percent to 2,461.43 points.
The Stock Exchange of Thailand index moved down 17.83 points, or 2.78 percent, to close at 624.56 points on Tuesday.
Source:Xinhua
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