Asia markets sink amid pessimism over US(HK -5.49, Shanghai -5.14%, Japan -3.86%, SK -2.95%)

AP ^ | 01/21/08 | CARL FREIRE

[TigerLikesRooster]

Asia markets sink amid pessimism over US

By CARL FREIRE, Associated Press Writer

1 hour, 22 minutes ago

Stock markets across most of Asia fell Monday following declines on Wall Street last week amid investor pessimism over the U.S. government's stimulus plan to prevent a recession.

A contraction in the American economy would likely hurt profits at Asian exporters, although rising trade and investment within the region has made Asia less dependent on the U.S. economy than in the past.

Investors sold off shares, unimpressed by the economic stimulus plan President Bush announced Friday. The plan, which requires approval by Congress, calls for about $145 billion worth of tax relief to encourage consumer spending.

Japan's benchmark Nikkei 225 index slid 3.9 percent to close at 13,325.94 points, while Hong Kong's Hang Seng index was down 3.5 percent in afternoon trading at 24,323.44.

China's Shanghai Composite index plunged 5.1 percent and India's market was down 2.7 percent. Markets in South Korea, Australia, Singapore, Taiwan and the Philippines also sank.

"People are certainly nervous about a potential recession in the U.S. spilling over to the rest of the world," said David Cohen, Director of Asian Economic Forecasting at Action Economics in Singapore.

"Maybe there's still some wariness about politicians are able to come up with a compromise and act sufficiently quickly," Cohen said. "I think the impact would be marginal anyway."

On Friday, the Dow Jones industrial average slid 0.5 percent to 12,099.30, and some analysts warned that the U.S. market could be in for a period of protracted declines.

Investors also have shrugged assurances from Federal Reserve Chairman Ben Bernanke that the U.S. central bank is ready to act aggressively — which means a likely big interest rate cut later this month — to help support an economy pummeled by devastation in the housing and credit markets.

Jitters about the U.S. economy have dragged on Asian markets, many of which surged last year. Since the start of the year, Japan's benchmark index has declined 13 percent, while Hong Kong's blue-chip index is down more than 11 percent.

In Tokyo trading, exporters got hit hard, with Toyota Motor Corp. losing 3.3 percent and Honda Motor Co. sinking 3.4 percent. Banks also declined; Mizuho Financial Group lost 5.3 percent.

Still, increased trade within Asia has made the region less reliant on the United States than in the past, prompting some analysts to predict that Asia won't suffer dramatically from a U.S. recession.

Excluding Japan, 43 percent of Asia's exports go to other nations in the region, Lehman Brothers calculates — up from 37 percent in 1995.

A drop of 1 percentage point in U.S. economic growth would shave 1.3 percentage points from China's growth rate due to lower exports, Citigroup estimates. But China's economy will still likely expand 11 percent this year, the investment bank predicts.

Also, some strategists say Asian markets are now oversold and will rebound as investors snatch up stocks that have fallen to attractive levels.

"We hold our view that the rapid correction in the past two weeks is offering a good opportunity to buy quality stocks," Taifook Research in Hong Kong said in a note.

[TigerLikesRooster]

Symbol	Name	Last Trade	Change	Related Info
^AORD	All Ordinaries	5,630.90 12:11AM ET	168.50 (2.91%)	Components, Chart, More
^SSEC	Shanghai Composite	4,914.44 2:00AM ET	266.08 (5.14%)	Chart, More
^HSI	Hang Seng	23,818.86 3:38AM ET	1,383.01 (5.49%)	Components, Chart, More
^BSESN	BSE 30	17,791.86 3:38AM ET	1,221.84 (6.43%)	Chart, More
^JKSE	Jakarta Composite	2,479.19 3:52AM ET	131.95 (5.05%)	Components, Chart, More
^KLSE	KLSE Composite	1,439.49 Jan 18	21.22 (1.45%)	Components, Chart, More
^N225	Nikkei 225	13,325.94 2:00AM ET	535.35 (3.86%)	Chart, More
^NZ50	NZSE 50	3,646.91 Jan 20	17.45 (0.48%)	Components, Chart, More
^STI	Straits Times	2,929.16 Jan 20	175.09 (5.64%)	Components, Chart, More
^KS11	Seoul Composite	1,683.56 1:02AM ET	51.16 (2.95%)	Components, Chart, More
^TWII	Taiwan Weighted	8,110.20 12:46AM ET	74.45 (0.91%)	Chart, More

[TigerLikesRooster]

European Index

Symbol	Name	Last Trade	Change	Related Info
^ATX	ATX	3,781.63 3:42AM ET	116.65 (2.99%)	Components, Chart, More
^BFX	BEL-20	3,600.87 3:54AM ET	94.26 (2.55%)	Chart, More
^FCHI	CAC 40	4,945.55 3:54AM ET	146.85 (2.88%)	Chart, More
^GDAXI	DAX	7,113.01 3:42AM ET	201.16 (2.75%)	Chart, More
^AEX	AEX General	437.85 3:54AM ET	12.23 (2.72%)	Chart, More
^OSEAX	OSE All Share	461.37 3:42AM ET	12.25 (2.59%)	Components, Chart, More
^MIBTEL	MIBTel	26,460.00 3:54AM ET	450.00 (1.67%)	Components, Chart, More
^IXX	ISE National-100	90.13 Jan 18	0.39 (0.43%)	Chart, More
^SMSI	Madrid General	1,470.00 Jan 18	13.94 (0.94%)	Components, Chart, More
^OMXSPI	Stockholm General	304.30 3:54AM ET	5.79 (1.87%)	Chart, More
^SSMI	Swiss Market	7,506.50 3:54AM ET	185.48 (2.41%)	Chart, More
^FTSE	FTSE 100	5,767.40 3:54AM ET	134.30 (2.28%)	Components, Chart, More

[bruinbirdman]

Good show. Ain't "view source" grand!

Now, given the above, where do I want to sit for awhile? I will take the good ol' U.S.A. anyday.

yitbos

[bruinbirdman]

Europe is opening to some big hits this morning.

yitbos

[trumandogz]

the dollar is sinking like a peso.

[gpapa]

Sit on cash. It looks like a rough ride ahead.

[bruinbirdman]

"the dollar is sinking like a peso"

Euro Falls to Four-Month Low Against Yen; ECB Predicts Slowdown

yitbos

[trumandogz]

http://futures.tradingcharts.com/chart/US/M

[Sandreckoner]

Regardless of whether it’s accurate to say the dollar is sinking like a peso (which is difficult to understand from whichever side of the analogy you’re approaching), what does that have to do with this article?

[trumandogz]

Admittedly, comparing the dollar to the peso is hyperbole but since when has it been an offense to use the element of hyperbole in political discussion?

And yes, the US economy will continue to be strong in comparison to the remainder of the world but in the very long term there will be equalization of the world economies via globalization.

[RSmithOpt]

The GOP is going to get creamed this election especially if the 'recession' is as rough as I see it coming. Congress and W are back-pedaling as hard as I have ever seen when just 6 months ago W was grinningly touting the US economy.

IMHO, we're just now seeing the depth of the sham w/ respect to the / open border - illegal immigration /artificially contrived - 'economy saving' housing - construction - / artificial 'new job' number boosting / smoke and mirror show.

However, the US export business has picked up.... Blackwater & Haliburton jobs esp. Don't forget the $28 billion the GAO can't find that was sent over to Iraq too. No more news on that 'econmic stimuls as' for running things in Iraq that vanished just like the last flippers' profits.

Hmmmm a record $38 billion in bonuses paid out to the Wall Street brokerage execs this past December.

The December in-store retail sales number when compared to the government supplied 'growth' of the GDP is not good. MSM and Congress and Wall Street know the exact numbers.

The large chain stores reported their numbers with only a few published in the media. From what independents in this area told me, worse season since Dec. 2002 for them. Still haven't seen 2 agreeable reports yet with CCard purchases for the last quarter.

Well one thing's for sure: Everyone can expect state and local taxes to go up, that is, back door style because of the 'unforeseen' economic downturn. States like NC will still see the need to hand out billions in education. services, and medical care to all the illegals in our state and 'well, somebody has got to pay for the Dem votes.'

I'm don't want to sound like a doom and gloomer, not really at all. But I have family and friends that have for years worked in the housing construction industry and they have without a doubt been severely hurt (stagnant incomes) for the last 6 years especially from being undercut by illegal construction labor. And with food and energy having doubled (or more) in the same period, they are hurting. We ain't seen nuttin' yet. Retired folks on fixed incomes have been in the same boat too with respect to food, energy, and the increase in local and state taxes as Congress cut money to the states in 2002-2003.

[Uncle Ike]

” I’m don’t want to sound like a doom and gloomer, “

Careful — those of us who report what we observe and apply facts and logic have a habit of being bombarded with scurrilous ad hominem attacks by the usual gaggle of “I’ve got mine/nothing wrong here/aren’t the emperor’s new clothes just beautiful?” mindless children....

Parenthetically — someone upthread suggested staying in cash — I go one step farther: start looking into trade goods, against the day that cash ain’t what it used to be....

[RSmithOpt]

Ike, this has been coming at our economy for a while now. Food and energy and the medical industry will be about the only sectors in the near term that will be 'business as usual'. I moved 1/2 my 401K into bonds in back last summer which has helped, cause the rest is taking it on the chin.

The instant gratification / credit card living mindset of 'the children' lives is gonna get a serious reshaping. Except for my mortgage, I have little other debt and glad too. Good time to buy into the market in about another 8-10 months if one can 'ride' the upturn for the next 3 years after that.

[Vet_6780]

Very few people understand the core problem and it ain't the stock market.

It's the debt markets and the banks.

The American people are about to see the effects of a severe deflation for the first time in 75 years as the debt bubble implodes.

The banks are literally broke, they have less than zero reserves in their accounts at the Fed for the first time in history !

We have not seen this show before.

[ought-six]

My 401K has taken one hell of a beating over the last few months. So much for early retirement.

[Son House]

Yep, we’re going to need huge tax cuts, and government spending will have to slow for to a trickle. Tax rebates are more pork deficit spending that may have to be payed off long term. The only thing that will be good is the lower dollar cost averaging for my long term strategy.

[Son House]

It’s good for the 401k to not buy at record stock market levels all the time, lowers the dollar cost averaging, just be sure to start moving into fixed income 5 to 10 years from retirement so you keep the compounding interest gains.

[DB]

Sit on cash?

Cash is depreciating fast...

[Son House]

It’s the debt markets and the banks.

Interesting point.

[RSmithOpt]

It’s a gamble either way....will the depreciating dollar fall faster than the market indexes in the next 18 months? I bet that it wouldn’t. I reckon one could have yanked the money and bout REIT’s back then on the advice of the FFP (family financial planner) that use to work for Countrywide? Not all the bonds I am invested in are treasuries....many are municipal. Oil has peaked and investment capital for alternative energy companies will be very scarce. Maybe I can get a second night time job muling illegals across our borders? I heard that pays well and our government doesn’t look for it except at the border check points. </S