News / Asia

    Asian Markets Drop After Wall Street Reacts to Obama's Bank Limits

    Multimedia

    Audio

    Asian stock prices have dropped in line with markets in the United States after President Obama announced plans for new limits on how banks invest.

    Benchmark indexes in Australia, Hong Kong, Japan, and Seoul fell up to two and a half percent Friday. Some markets sank nearly three percent in early trading, but the losses eased in the afternoon.

    President Obama said Thursday he wants to restrict banks' ability to make excessively risky investments to avoid another financial crisis.

    U.S. markets drooped on the news, leading Asian stocks to follow suit.

    David Cohen, director of Asian forecasting at Action Economics in Singapore, says the sell-off is just a reflex and Mr. Obama's limits on banks are not likely to have significant effects on world markets.

    "A lot of it is political in the United States, revolving around the populist anger at Wall Street," he said. "And, the fact that Obama waited this long to introduce the measure I think says something to that. It's more … as much a political response to some of the problems that the Democrats have been feeling lately."

    The drop on Wall Street was the second day that stocks took a tumble. Markets slumped Wednesday after China said it would reduce bank lending to slow its economy.

    Chinese officials said Thursday their economy is back into double-digit growth and has recovered from the global financial crisis.

    Cohen says curbs on bank lending are a logical step in view of China's rapid growth.

    "The reason the policy makers in Beijing are looking to tighten policy a little bit is simply because their economy has been showing strong momentum as it entered 2010 and it just might be appropriate to withdraw some of the aggressive stimulus that they added about a year ago in a successful effort to counter the drag from the global downturn," he said.

    Some economists have said China's economy was an important factor in the world avoiding a more serious economic problem.

    Cohen agrees. He says the global economy is now on track to recover with Asian economies, and in particular China. in the lead.

    But, he says although there is a lower chance of another financial crisis there are still risks that could shake up markets.

    Cohen says there are no doubt more problems hidden in some banks and that governments still have to deal with the massive debts racked up from spending to stimulate their economies.

    In the Asian markets, Australia's All Ordinaries index fell 1.6 percent, Japan's Nikkei closed down almost 2.6 percent and Seoul's Kospi lost 2.2 percent. Hong Kong's Hang Seng closed six-tenths of a percent lower, but had been down nearly three percent in the morning.
     

    You May Like

    No More Space Race for US, Rivalry Gives Way to Collaboration

    What began as a struggle for dominance in space between two world powers has changed entirely to one of joint efforts

    Beijing Warns Critics Over South China Sea Dispute

    Official warns critics that the more they challenge China's position regarding disputed territories in one of world’s busiest waterways, the more it will push back

    Move Over Millennials, Here Comes iGeneration

    How the first generation to be born, almost literally, with a smartphone in hand, might change America

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    British Government to Resettle Unaccompanied Child Refugeesi
    X
    Henry Ridgwell
    May 06, 2016 9:24 PM
    After criticism from lawmakers across the political spectrum, the British government has signaled that it will accept thousands of unaccompanied Syrian child refugees who have fled to Europe. It follows a campaign by a group of former Jewish refugees who were given refuge in Britain from Nazi persecution in the 1930s. VOA's Henry Ridgwell reports.
    Video

    Video British Government to Resettle Unaccompanied Child Refugees

    After criticism from lawmakers across the political spectrum, the British government has signaled that it will accept thousands of unaccompanied Syrian child refugees who have fled to Europe. It follows a campaign by a group of former Jewish refugees who were given refuge in Britain from Nazi persecution in the 1930s. VOA's Henry Ridgwell reports.
    Video

    Video Strangers Share Secrets Through Postcards

    Frank Warren owns a million secrets. Strangers from around the world send him postcards with their confessions, their disappointments, and their hopes for the future, all anonymously. He displays his favorites online and in exhibits, and shares them with audiences in sold-out appearances around the globe. As VOA's Julie Taboh reports, what started as a simple social experiment has evolved into a multi-faceted and hugely successful global phenomenon.
    Video

    Video Largest Ground-based Telescope Under Construction

    While NASA's engineers are nearing the final phase of assembling the new James Webb space telescope, scheduled to be deployed in 2018, an international consortium led by the U.S. is laying foundations and building parts for a ground-based telescope, much larger than any other. VOA's George Putic reports.
    Video

    Video Image Recognition Market Seen Doubling by 2020

    From auto tagging on Facebook to self-driving cars, image recognition technology as it exists today is still in its beginning phases, experts say — and will soon change the way users and corporations interact with the physical world. VOA's Ramon Taylor reports.
    Video

    Video Child Labor in Afghanistan Remains a Problem

    With war still raging in Afghanistan, the country also faces the problem of child labor as families put their school-age children to work to help make ends meet. But, thanks to VOA's Afghan Service, two families whose children had been working in a brick-making factory - to earn their livings and pay off family debts - now have a new lease on life. Zabihullah Ghazi reports.
    Video

    Video Kurdish Troops Recount Firefight Which Killed US Navy SEAL

    A U.S. Navy SEAL killed Tuesday, when Islamic State fighters punched through Kurdish lines in northern Iraq, was part of a quick reaction force sent to extract other U.S. troops trapped by the surprise offensive. VOA's Kawa Omar spoke with Kurdish troops in the town of Telskuf -- the scene of what U.S. officials called a "dynamic firefight."
    Video

    Video British Lawmakers Warn EU Exit Talks Could Last A Decade

    Leaving the European Union would mean difficult negotiations that could take years to complete, according to a bipartisan group of British lawmakers. While the group did not recommend a vote either way, the lawmakers noted trade deals between the EU and non-EU states take between four and nine years on average. Henry Ridgwell reports on the mounting debate over whether Britain should stay or exit the EU as the June vote approaches.
    Video

    Video NASA Astronauts Train for Commercial Space Flights

    Since the last Shuttle flight in 2011, the United States has been relying on Russian rockets to launch fresh crews to the International Space Station. But that may change in the next few years. NASA and several private space companies are developing advanced capsules capable of taking humans into low orbit and beyond. As VOA's George Putic reports, astronauts are already training for commercial spacecraft in flight simulators.
    Video

    Video US Worried Political Chaos in Iraq Will Hurt IS Fight

    The White House is expressing concern about rising political chaos in Iraq and the impact it could have on the fight against the Islamic State. The U.S. says Iraq needs a stable, central government to help push back the group. But some say Baghdad may not have a unified government any time soon. VOA's White House correspondent Mary Alice Salinas reports.
    Video

    Video Press Freedom in Myanmar Fragile, Limited

    As Myanmar begins a new era with a democratically elected government, many issues of the past confront the new leadership. Among them is press freedom in a country where journalists have been routinely harassed or jailed.
    Video

    Video Taliban Threats Force Messi Fan to Leave Afghanistan

    A young Afghan boy, who recently received autographed shirts and a football from his soccer hero Lionel Messi, has fled his country due to safety concerns. He and his family are now taking refuge in neighboring Pakistan. VOA's Ayaz Gul reports from Islamabad.
    Video

    Video Major Rubbish Burning Experiment Captures Destructive Greenhouse Gases

    The world’s first test to capture environmentally harmful carbon dioxide gases from the fumes of burning rubbish took place recently in Oslo, Norway. The successful experiment at the city's main incinerator plant, showcased a method for capturing most of the carbon dioxide. VOA’s Deborah Block has more.

    Special Report

    Adrift The Invisible African Diaspora