FocusAsian stocks trim losses after plunge

07 October 2008 07:19  [Source: ICIS news]

SINGAPORE (ICIS news)--Asian stocks trimmed their losses in early afternoon trade on Tuesday after an initial plunge in tandem with US markets’ tumble overnight as global recession fears continued to rattle investor confidence.

 

“We are seeing some bit of recovery in the Asian markets, but it will be tough to say that this signals a bottoming of the equities market,” said Kum Soek Ching, an analyst at Credit Suisse.

 

Regional indexes reacted to the 3.6% decline in the Dow Jones Industrial Average to close at 9,955.50, after diving 800 points on Monday’s trade.

 

Japan’s Nikkei 225 led the early morning rout, falling by more than 5% before cutting back the losses to 2.66% at 10,194.71 at 13.32 Singapore time (0532GMT).

 

South Korea’s KOSPI Composite Index staged a rebound, rising 0.84% at 1,370.10, after initially falling over 2%.

 

Select petrochemical stocks were hit, with South Korea’s LG Chemical down 0.88%, Hanwha retreating 2.21% and SK Energy 3.65% lower.

 

As Europe goes the way US did in addressing problems in its financial sector through a series of bailouts, investors were left nervously wondering how everything will translate into the big economic picture, analysts said.

 

“This is no longer about valuation, but about how protracted this [possible] recession is going to be. We are now factoring in a deeper economic impact in Asia than before,” Credit Suisse’s Kum said.

 

Europe was still struggling to come up with a unified approach to tackle its own financial turmoil head-on, while the US managed to pass its $700bn bailout package Friday last week.

 

“That (bailout) helped us prevent a systemic meltdown. It would have been worse without it but people are focusing on how bad is the damage to the real economy,” she added.

 

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By: Pearl Bantillo
+65 6780 4359

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