Asia Markets Tank On U.S. Recession Fears

Apart From China, Where Shares Advance Against Trend, Gloomy U.S. Friday Haunts Markets

(AP)  Most Asian markets tumbled Monday as investors reacted nervously to a steep decline on Wall Street Friday after disappointing economic and corporate news reawakened worries about a U.S. recession.

Japan's Nikkei 225 index plunged 4.5 percent to close at 12,992.18, and India's benchmark stock index slid 5.3 percent.

The Bombay Stock Exchange's 30-share Sensex index dropped more than 939 points to a provisional close of 16,639.54 points.

On the broader National Stock Exchange, the 50-company S&P Nifty index also slipped 279 points, or 5.4 percent, to 4,944 points.

Markets in Hong Kong, South Korea and Australia also fell sharply. However, shares in mainland China advanced.

Investors across much of the region dumped shares after a series of depressing economic and corporate reports Friday out of the United States - a vital export market for Asia - sent the Dow Jones industrial average falling 315.79, or 2.51 percent, to 12,266.39.

The bad news included poor quarterly results from American International Group Inc. and Dell Inc. and weaker-than-expected results on the Chicago purchasing managers index, which painted a dreary picture of the manufacturing sector.

"It's all due to fears of a recession in the U.S.," said Craig James, chief equities economist at CommSec in Sydney, Australia.

The dollar's drop to a three-year low against the yen also weighed on sentiment in Tokyo as dollar weakness erodes overseas earnings at Japan's exporters.

The greenback fell as low as 102.92 yen, its lowest point since January 2005. By mid-afternoon in Tokyo, the dollar bought 103.17 yen, down from 103.96 yen late Friday in New York. The euro also rose to $1.5215 from $1.5194.

Asian markets, which have fallen much of the year so far, had staged a modest recovery through the middle of last week, with Tokyo's Nikkei climbing to a seven-week high last Wednesday.

But pessimism returned Monday, with Hong Kong's Hang Seng index down 3 percent at 23,614.50 in afternoon trading.

In Seoul, the Korea Composite Stock Price Index fell 2.3 percent to 1,671.73, Australia's benchmark S&P/ASX200 index slid 3 percent to 5,405.8. India's Sensex fell 3.3 percent to 16,992.57.

Markets in mainland China bucked the trend. The benchmark Shanghai Composite Index was up 2.3 percent at 4,446.25.

The Tokyo market, Asia's largest, was likely to remain volatile for the rest of the week, said Koji Takeuchi, senior economist at Mizuho Research Institute.

[tryhonesty]

America was in deep trouble when bush was appointed President of the United States in 2000 and the RepubliCONs/NeoCONs were placed in full power to corrupt Congress and the White House. 1.20.09. This date can not come soon enough! What a MESS!

[cmjoffice]

Obama needs to do more than talk. The man talks well. He needs to show what he is going to do. We can''t just elect someone because they can talk. We need actions with good planning. Bush needs to step up now! America is not in a "slowdown". America is in serious trouble. Get to work Washington!

[wardoglrs]

Learn the truth
http://www.ideachannel.tv/

[payasyougo]

It was we, the US consumer that got us here at the point of production and jobs moving overseas.

Years ago when cheap inports were a small percentage of choice, we started making that choice. After a few years, our US corporations saw the trend (in lost sales) and needed to make changes to compete. So how to cut costs? Either cheaper production lines or cheaper labor. US corporations canNOT control your (my) choice in where we spend our money.

Stop blaming the government for your (our) choices in life and stop looking to the government as the solution to all problems.

If you have not noticed, the government today costs more than it is worth.

[payasyougo]

It was we, the US consumer that got us here at the point of production and jobs moving overseas.

Years ago when cheap inports were a small percentage of choice, we started making that choice. After a few years, our US corporations saw the trend (in lost sales) and needed to make changes to compete. So how to cut costs? Either cheaper production lines or cheaper labor. US corporations can control your (my) choice in where we spend our money.

Stop blaming the government for your (our) choices in life and stop looking to the government as the solution to all problems.

If you have not noticed, the government today costs more than it is worth.

[davidlar2]

Even Obama said that he would not pull out of NAFTA because it would cost more jobs than staying in NAFTA. It is somewhat dishonest of him to campaign on the destructiveness of NAFTA and then admit that not having NAFTA would be even more destructive.

[davidlar2]

The description of a tax incentive for companies to move jobs overseas is based upon the premise that the US government should tax all companies (and people) on all income anywhere in the world, even if it is not using the tax money to provide any services to these people/companies. No other developed country taxes companies or its citizens on global income (ie not Germany)- only the US.

In fact, Germany does not have high tariffs against Chinese manufactured goods, but also does not have a high trade deficit. Germany also has a higher percentage of its economy based upon trade, even imports, than the US does. The problem is not that the US imports things, it is that we don''t produce enough things to export that other countries want to buy at the price we ask.

Again, there is little fact in the free trade bashing statements below. All the evidence points to protectionism reducing (not increasing) long term economic growth in the US. We need to get our act together, not blame other people for out-competing us.

[davidlar2]

The difference between Germany and us is not that Germany doesn''t allow the sale of Chinese manufactured goods in Germany, it is that German goods can compete with Chinese goods through higher quality.

China sells cheap low quality goods.
Germany sells expensive high quality goods.
The US sells expensive low quality goods.

Free trade is not the problem. It is that America cannot produce goods that either Americans or the rest of the world want to buy. Forcing Americans to buy them by removing competition doesn''t do anything to help us. We need to make things that Americans and foreigners want to buy.

The extreme of no trade is a country where everyone is a subsistance farmer (doesn''t trade anything with anyone). It is clear that this is not good for anyone. The extension that it is good for Americans only to trade with other Americans is not particularly persuasive either.

[johnstossel]

Hey, kennedy7955. What Bush lie!!?? I live in the south and the bozos around here voted for him because he is anti-abortion!!! He waits until they are 18 years old and then sends them off to fight in his stupid-*** war. It''s called delayed abortion!!!!

[kennedy7955]

China doesn''t just sell us *** but everything we need. The shame is we have allowed our manufacturers to move to China or go out of business altogether in the name of free trade. Not only has our government allowed this to happen but they have given tax incentives to our companies to leave.

We have the most open trade borders in the world and not a single other country in the world has negotiated as badly as we have, certainly not China or Japan. So why is this happening? It is because it is good for big companies to have it this way and they have the influence in government.

Germany is the #1 exporter in the world. Do you think Germans would allow Chinese made products to put their companies out of business? Would the Germans allow their companies to pick up and leave Germany and at the same time, easily be able to export their foreign made products back into the country without high tariffs? Hell no.

Lastly, why is Barack Obama so popular? Maybe because he is the only candidate talking about these things and at the same time distancing himself from the corruption of lobbyists.

[davidlar2]

I agree completely that we need a president who will balance the budget and fight inflation. Do we have a candidate who will do this?

Bush has been a disaster. Clinton and Obama talk about increasing spending and blame trade with other countries for our economic problems. Anyone out there (besides Ron Paul who fared poorly) who understands economics?

Perhaps we need to make economics a basic course in high school, because Americans seem too ready to vote for candidates (Bush, Clinton, Obama, ....) who prey on our ignorance of economics.

[ajaxtheleast]

The Bush administration after observing that
within their own term of office that deceit,
disrespect for human life, greed, arrogance,
cheating, lieing and coverup did indeed
trickle down they were convinced that they
were on the right track.

[kennedy7955]

Bush said there was no recession in sight and the markets reacted as if he was lying. Go figure...

[lochlan-2009]

Excellent Job Bernanke. Our country is so close to the the edge and still NO ONE IS PAYING ATTENTION. We have propaganda people on here left and right telling us that bad things are good and good things are bad.
The Euro is now $.16 away from a 100% increase against our dollar during the Bush Administrations "legacy". Comodity prices are reflecting clearly this is more the Fed devaluing our dollar than the current recession. Stock markets are suppose to go up when the Fed does a rate decrease and bonds and the dollar are suppose to go down. We''re seeing everything (except commodities of course) go down, and inflation that is going to be unbarably high for a long time to come. It''s already worse, by a long shot, then the unbelievibly fudged numbers they are giving us.

ARREST THE BUSH ADMINISTRATION!!!! The damage the uneducated allowed this administration to do to themselves and the rest of us.

[antoniof123]

Markets in Hong Kong, South Korea and Australia also fell sharply. However, shares in mainland China advanced.

I just can''''t figure out why some people never understand that.

Posted by skyk at 06:46 AM : Mar 03, 2008

The trickle down works for China it seems.

Of course skyk, the reason why some people can''t figure it out is because they listen to their radio talk show host to tell them what is happening.

The GOP has become so desparte that they will say and do anything to keep some power. But in the end they will lose it becasue like you said the trickle down doesn''t work.

I proved a point I invested a modest amount of money in the market and after 3 years the only gain after all the fees were removed was marginal at best.

Some trickle down.

[rushlimpdrug]

Asia has a market?

America should look into it.
Maybe we can make krap and sell it there.
You know, like they do here.

[formrusmcsgt]

Bush stated Thursday that there is no recession occurring.

Wall Street didn''t believe it and nosed-down big-time on Friday.

Today, international markets did the same thing.

Looks like the only one who believes Bush when he opens his mouth is Laura.....

[olebd]

I stopped by my local Wal-Mart this weekend and it seemed as crowded as ever to me. I guess that explains why China''s economy is the only one that''s growing.

[skyk-2009]

People hear a rumor that there might be a recession...so they stop spending money...which creates the recession.


Posted by shanev137 at 03:51 AM : Mar 03, 2008
+ report abuse

I''ve heard this so many times and I wonder how people like this can be SO out of touch with how REAL people, those that make and spend the money live. If it weren''t so sad it would be funny. To those of us out here who work every week, rumors and the like are the last thing we think about. To us it''s very basic and simple. IF there is enough money that TRICKLES down to us, so we can buy, we buy. If it doesn''t TRICKLE down then we don''t buy. Now since WE are what run''s all the economy''s out there, you have to figure that YET AGAIN Trickle Down HAS NOT worked. I just can''t figure out why some people never understand that.

[shanev137]

Self-fulfilling prophecy.

People hear a rumor that there might be a recession...so they stop spending money...which creates the recession.