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

India PM Modi's party distances itself from religious conversions

BJP under fire for being slow to rein in hardline affiliate groups allegedly trying to promote a Hindu-dominant agenda by luring Muslims and Christians to convert to Hinduism More

Anti-Whaling Group Found in Contempt of Court

Radical environmentalists who threw acid and smoke bombs at Japanese whalers in the waters off Antarctica continue their campaign to disrupt Japan's annual whale hunt More

UN's Ban Urges End to Discrimination Against Ebola Workers

Ban was speaking in Guinea on the second day of a whistle-stop tour aimed at thanking healthcare workers of the countries at the heart of the epidemic More

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.
Sudan School Becomes Target of Aerial Attacksi
X
December 19, 2014 12:45 AM
The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Putin Says Russian Economy Will Emerge Stronger

Russian President Vladimir Putin has said his country's sinking economy will not only recover but also become stronger, despite falling oil prices and Western sanctions over Ukraine. VOA's Daniel Schearf reports.
Video

Video Detained Turkish Journalists Follow Teachings of US-Based Preacher

The Turkish government’s jailing of critical journalists has sparked international condemnation and is being seen as an effort to undermine the followers of an ailing Turkish preacher based in the United States. VOA religion reporter Jerome Socolovsky has more.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.

All About America

AppleAndroid