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Asian Markets Plummet Wednesday - 2002-07-24

Asia markets plummeted on Wednesday, erasing most of Tuesdays gains, because of fears that Wall Street has not yet seen the bottom. Some analysts are saying the losses are unavoidable given the gloom in the U.S. market.

Asian markets on Wednesday retreated after Wall Street sank for the fourth straight day. Tokyo and Hong Kong's main share indexes broke below the key 10,000 point level.

Hong Kong closed at 9,971, down more than 3 percent. Hong Kong's banking shares saw the biggest losses after concerns grew that major American banks helped disguise the debts of bankrupt energy giant Enron.

In Tokyo, the Nikkei index ended at 9,947, down almost 3 percent from the day before.

In the United States, the Dow Jones Industrial Average fell 1 percent Tuesday, while the technology-laden NASDAQ index lost four percent. The Dow has shed about 17 percent in value this month.

Technology shares in Taiwan took a beating, pushing the main share index down more than 2 percent to 5,039 points.

Analyst Cliff Tan of Citigroup Singapore says the fall in Asian markets is unavoidable given the magnitude of the correction on Wall Street. He says, however, that Asian shares have not lost as much ground as U.S. stocks for several reasons. "Even though Asia markets are selling off in absolute terms, they continue to outperform the U.S. market quite a bit this year," he said. "I would say that fundamental equity investors, when they look at the world, Asia still looks quite attractive in terms of valuations and the macro-economic environment out here."

South Korea's Kospi index also took a beating Wednesday - finishing down nearly 3 percent at 721 points. Even news that rating agency Standard & Poor's upgraded the country's debt rating could not stem the selling.

Markets in the rest of Asia echoed the losses on Wall Street. Singapore's Straits Times Index lost more than 2 percent and Thailand's leading index gave up about 3 percent.