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Asian stock markets resume slide after US rout

(Agencies)
Updated: 2009-03-06 14:33

HONG KONG -- Asian stock markets resumed their downward slide Friday after Wall Street fell to its lowest levels in more than 12 years amid deepening fears about the future of General Motors Corp. and major financial companies.

A woman walks past a display showing stock prices in downtown Tokyo March 6, 2009. [Agencies]

The region's retreat marked a return to the selling that had gripped global equities markets until a brief rally earlier this week on hopes China would announced major new stimulus measures.

Investors were rattled by a warning from General Motors that the struggling automaker may have to file for bankruptcy.

Along with growing uncertainty about the financial system, the news led to yet another rout in US markets with banking stocks suffering some of the steepest drops. Citigroup Inc., stilling reeling despite billions of dollars in government aid, fell below $1 a share.

"You can buy Citi at the 99 cent store now," said Paul Schulte, a chief Asia equity strategist at Nomura International in Hong Kong. "It's nauseating. We keep grasping at straws to find hope, and the markets keep punishing us."

Investors were also holding back ahead of what is expected to be an especially bleak US employment report later Friday.

Every major Asian market traded into the red, though the losses were somewhat more muted than the sharp declines in the US

Japan's Nikkei 225 stock average fell 223.47 points, or 3 percent, to 7,210.02, while Hong Kong's Hang Seng shed 155.25, or 1.3 percent, to 12,055.99. South Korea's Kospi was off 0.3 percent at 1,054.80.

Elsewhere, Shanghai's benchmarks swooned 1.2 percent, Australia's stock measure was 1.5 percent lower and Singapore's key index shed 0.7 percent.

Overnight in the US, the Dow fell 281.40, or 4.1 percent, to 6,594.44, its lowest close since April 1997.

Broader indicators also tumbled. The S&P 500 index dropped 30.32, or 4.3 percent, to 682.55, its lowest close since September 1996.

Wall Street was headed for another weak opening as US futures sank. Dow futures were off 15 points, or 0.2 percent, at 6,616 and S&P500 futures fell 1.2, or 0.2 percent, to 684.90.

Oil prices were higher in Asian trade, with benchmark crude for April delivery up 31 cents at $43.92 a barrel by midday in Singapore on the New York Mercantile Exchange. The contract fell $1.77 overnight to settle at $43.61 a barrel

In currencies, the dollar gained to 98.25 yen from 98.20 yen. The euro traded higher at $1.2579 from $1.2548.