World stocks fall sharply after Wall Street tumble

[Joanne98]

HONG KONG (AP) — World stock markets dropped sharply Friday, with benchmarks in Japan and Hong Kong sliding about 2 percent or more, after gnawing economic fears sent Wall Street tumbling to its lowest close in more than six years.

Investors in Asia and Europe found few reasons to wade into the market after the Dow Jones breached the levels it touched in November when global equities went into a tailspin at the height of last year's financial crisis.

The Dow's miserable finish — its worst since Oct. 9, 2002, when the last bear market hit bottom — deepened concerns that the markets' downturn is far from over. It also provided a clear sign that investors don't see a quick end to the worst global slowdown in decades despite the unprecedented intervention in economies and markets by governments around the world.

"People just don't know where the bottom is," said Desmond Tjiang, Hong Kong-based chief investment officer at Fortis Investment Management, which manages $3 billion in Asian equities.

"The macro indicators are still deteriorating, the companies aren't giving any guidance and the governments don't know what they're going to do," Tjiang said. "Basically nobody has any visibility or knows what's going to happen."

In Asia, Japan's Nikkei 225 stock average lost 141.27 points, or 1.9 percent, to 7,416.38, and the broader Topix index hurtled to its worst finish in 25 years.

Hong Kong's Hang Seng dropped 324.59, or 2.5 percent, to 12,699.17. In South Korea, the Kospi shed 3.7 percent to 1,065.80 as the country's currency, the won, lost more ground against the dollar. A weaker won can lead to higher costs for domestic firms.

Stock measures in India, Taiwan and Singapore sank about 2 percent, while those in Australia and Thailand were down over 1 percent.

In mainland China, where markets are largely sealed off from foreign investors, Shanghai's benchmark gained 1.5 percent after the government said it would aid light industry and petrochemical suppliers in its latest stimulus measures. That came as the governor of the central bank of Australia, its own economy heavily reliant on Chinese demand for commodities, said China's economy has already bottomed.

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