30 September 2008 11:17 [Source: ICIS news]
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SINGAPORE (ICIS news)--Asian markets and chemicals stocks closed down on Tuesday as hopes for a resolution to the widespread credit crisis were dashed when the US Congress voted down a $700bn bailout package late on Monday, economists and analysts said.
"A lot of fear is built into it. The Dow’s slump triggered the flight to safety. People are getting out of equity," said Lorraine Tan, equity strategist for
Risks of contagion for Asia’s banking system were not significant given its relatively small exposure to the
CFC Seymour analyst Dariusz Kowalzcyk pegged the subprime losses of Asian banks at about $25bn.
"Asian banks have not been hurt that much but there is the issue of sentiment and
panic, which is a global phenomenon," he said.
The shock defeat of the massive
"Right now the worry is whether there is going to be a package. Timing is important because policy makers are losing market trust," said Hong Kong-based Kowalczyk.
"With every day of declining market trust, the cost of bailout is rising, they should do more to reverse the decline in confidence. Passage of time is destructive," he added.
The Bush administration would have to come up with an alternative plan soon to stop the spread of market panic, analysts said.
"Something has to be passed here. Something has to be signed here. The
The list of casualties continued to grow, with the seizing of Washington Mutual last Friday and the government-orchestrated sale of Wachovia Group, the sixth largest bank in the
European financial institutions were reeling from the
Belgio-French municipal lender Dexia was the third list of bank bailouts in
Regional indices initially plunged between 3-6% taking the lead from the Dow’s unprecedented decline, but some managed to trim losses at the close of trading.
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