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Asian stocks plunge as global financial crisis spreads

TOKYO - Asian stocks nosedived throughout the region Monday as investors feared the US bail-out would fall far short of resolving the financial crisis that has also spread to Europe.

Stocks in Tokyo plunged to their lowest levels in five years on worries about the deepening global crisis despite the US Congress' approval of a 700-billion-dollar Wall Street bail-out.

The benchmark Nikkei 225 Stock Average fell by 4.25 per cent, while the broader Topix index of all first-section issues fell below 1,000 points for the first time since December 2003, 4.67 per cent.

The Bank of Japan also pumped 1 trillion yen (9.6 billion dollars) into the money markets. It was the 14th-consecutive business day it had made such an injection to ease disruptions in financial markets and free up credit.

The total amount of liquidity now infused into the economy by the Bank of Japan comes to 25.3 trillion yen since the US investment bank Lehman Brothers Holdings Inc filed for bankruptcy on September 15.

Taiwan stocks fell more than 3 per cent by mid-morning Monday as investors worried about the global economic slump.

"Major Asian shares dived today because, despite the passing of the 700-billion-US-dollar rescue package in the US Congress, many Americans don't think the package can solve all of America's economic problems," said Chiu Hsin-lin, executive vice president of the Industrial Bank of Taiwan Securities.

"The other factor is that the economic figures released by the US last week were discouraging," he added.

The US Labour Department reported last week that 159,000 jobs were lost in September, bringing the total for the year to nearly 800,000.

Shares on China's main stock market lost more than 5 per cent of their value on Monday, dragged down by banking stocks, on the first day of trading after the one-week National Day holiday.

State media said the plunge was a delayed reaction to global falls last week, after Chinese share values were protected by the week-long closure.

India's benchmark Sensex stock index plunged by nearly 6 per cent on capital outflows by foreign funds tracking the global financial crisis.

The 30-share-sensitive index, which lost 529.35 points in the previous session, plunged another 724.62 points in the trading on Monday.

It closed the day's trade at 11,801.70 - its lowest point in over two years - a loss of 5.78 per cent.

Thai shares lost 6.4 per cent in one of the steepest falls in Asia, on uncertainty both at home and abroad.

"All markets were down today but Thailand's fell hard because there are also concerns about our political situation," said Mongkol Phuengphaetha, an analyst at Adkinsons Securities.

"Foreign investors are playing a big role. They don't mind if they make a loss they just want money in hand," he said.

Besides the global insecurity about equities, Thailand is also suffering mounting political uncertainties. Shares fell sharply on the Seoul Stock Exchange, sending the benchmark Kospi index down 60.9 points, or 4.3 per cent, to close at 1,358.75.

Hong Kong share prices fell by more than 3 per cent Monday morning as investors across the region joined in a sell-off over fears that financial turmoil in Europe was spreading.

All 43 blue-chip companies closed down lower in Hong Kong with the heaviest losses in insurance companies and banks exposed to troubled US and European institutions.

In Australia, the ASX 200 gave up 155 points, or 3.3 per cent, to 4,540. The rout took the index back to where it was in December 2005.

Shares fell across the board, with mining stocks hit hardest because the financial crisis is slowing economies around the world and crimping demand for raw materials

Philippine shares dropped 2.59 per cent as investors took a wait-and-see attitude on the bail-out package approved by the US Congress over the weekend.

The Indonesian stock market also plunged by 10.02 per cent.