News / Asia

    Asian Markets Plunge Continues

    A foreign currency dealer of the Korea Exchange Bank walks past a screen displaying the Korea Composite Stock Price Index (KOSPI) at the bank's dealing room in Seoul August 8, 2011.
    A foreign currency dealer of the Korea Exchange Bank walks past a screen displaying the Korea Composite Stock Price Index (KOSPI) at the bank's dealing room in Seoul August 8, 2011.

    Stock markets in Asia continued to slide Monday, despite assurances from credit rating agency Standard and Poor's that its historic downgrade of the U.S. credit rating would have no immediate impact on Asia-Pacific sovereign ratings.  Investors are hoping the decline will be short-term if China can stabilize inflation and the U.S. economy does not suffer any further credit rating downgrades.

    Stocks in Hong Kong and Japan fell more than 2 percent Monday, the first day of trading after news broke that the United States lost its triple-A bond rating from Standard & Poor's.

    Shanghai and Seoul did even worse. It is the first time in history that America has lost its top-rung rating. S&P cited concerns about the nation's growing debt load and uncertainty about Congress' willingness to rein in borrowing.

    Also affecting investor confidence are worries that debt-ridden Spain and Italy could follow Greece, Ireland and Portugal in seeking bailouts from the rest of the European Union and raising the risk of a new banking crisis on the continent.

    Investors in Asia say these negative economic indicators, coupled with longstanding worries about the high rate of inflation in China, will leave financial markets in Asia unsettled for the short term.

    But Peter Lai, director of sales for the Hong Kong securities firm DBS Vickers, says while he expects some swings in Asian stock markets in response to the negative economic news, Asia's strong economies will continue to grow.

    “For the long term, I am going to say that, the revival of the economy undoubtedly [will] shift from Europe and America to the Asian countries because the pace of the revival of Asian countries will be much better than those of the Euro countries or the Americans,” he said.

    Lai says over time, increased domestic purchasing in Asia and other emerging economies can compensate for declining exports to the stagnant economies in the United States, Europe and Japan.

    Anton Gunawan, the chief economist for the Danamon Bank in Indonesia, agrees. He says while a U.S. slowdown will hurt Indonesian exports to a degree, the Indonesian economy is less dependent on America than it used to be.

    “More and more we are seeing that the Indonesian export within the region, being Asian countries, increasing rather dramatically," said Gunawan. "Not to mention also Indonesian export diversification to other areas like in Eastern European for example.”

    Investors have also been calling on the U.S. Federal Reserve to start pumping money into the American economy again to help underpin the slowing economic recovery.

    Ben Kwong, associate director of the investment banking firm KGI Asia Ltd., says any such announcement by the United States would likely have an immediate calming effect on Asia's markets. Action by China to control inflation would also help.

    “If there is any positive signs from the U.S. economy, and also some positive signal from China terms of peaking inflation, and that will provide a very good excuse for the Hong Kong stock market to have a strong technical rebound,” he said.

    Kwong says while the U.S. economic situation has made the markets a bit volatile for now, investors are projecting stable long term growth in Asia.

    US Debt

    You May Like

    Video US Observes Memorial Day With Wreath-laying, National Concert

    Obama lays a wreath at the Tomb of the Unknown Soldier in Arlington Cemetery

    The Strife of the Party: Will Trump Permanently Alter Republicans?

    While billionaire mogul's no-holds-barred style, high-energy delivery are what rocketed him to nomination, they also have created rift between party elites and his supporters

    China's Education Reforms Spark Protest

    Beijing is putting a quota system in place to increase the number of students from poor regions attending universities

    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.
    Chinese-Americans Heart Trump, Bucking National Trendi
    X
    May 27, 2016 5:57 AM
    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Chinese-Americans Heart Trump, Bucking National Trend

    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Reactions to Trump's Success Polarized Abroad

    What seemed impossible less than a year ago is now almost a certainty. New York real estate mogul Donald Trump has won the number of delegates needed to secure the Republican presidential nomination. The prospect has sparked as much controversy abroad as it has in the United States. Zlatica Hoke has more.
    Video

    Video Drawings by Children in Hiroshima Show Hope and Peace

    On Friday, President Barack Obama will visit Hiroshima, Japan, the first American president to do so while in office. In August 1945, the United States dropped an atomic bomb on the city to force Japan's surrender in World War II. Although their city lay in ruins, some Hiroshima schoolchildren drew pictures of hope and peace. The former students and their drawings are now part of a documentary called “Pictures from a Hiroshima Schoolyard.” VOA's Deborah Block has the story.
    Video

    Video Vietnamese Rapper Performs for Obama

    A prominent young Vietnamese artist told President Obama said she faced roadblocks as a woman rapper, and asked the president about government support for the arts. He asked her to rap, and he even offered to provide a base beat for her. Watch what happened.
    Video

    Video Roots Run Deep for Tunisia's Dwindling Jewish Community

    This week, hundreds of Jewish pilgrims are defying terrorist threats to celebrate an ancient religious festival on the Tunisian island of Djerba. The festivities cast a spotlight on North Africa's once-vibrant Jewish population that has all but died out in recent decades. Despite rising threats of militant Islam and the country's battered economy, one of the Arab world's last Jewish communities is staying put and nurturing a new generation. VOA’s Lisa Bryant reports.
    Video

    Video Meet Your New Co-Worker: The Robot

    Increasing numbers of robots are joining the workforce, as companies scale back and more processes become automated. The latest robots are flexible and collaborative, built to work alongside humans as opposed to replacing them. VOA’s Tina Trinh looks at the next generation of automated employees helping out their human colleagues.
    Video

    Video Wheelchair Technology in Tune With Times

    Technologies for the disabled, including wheelchair technology, are advancing just as quickly as everything else in the digital age. Two new advances in wheelchairs offer improved control and a more comfortable fit. VOA's George Putic reports.
    Video

    Video Baby Boxes Offer Safe Haven for Unwanted Children

    No one knows exactly how many babies are abandoned worldwide each year. The statistic is a difficult one to determine because it is illegal in most places. Therefore unwanted babies are often hidden and left to die. But as Erika Celeste reports from Woodburn, Indiana, a new program hopes to make surrendering infants safer for everyone.
    Video

    Video California Celebration Showcases Local Wines, Balloons

    Communities in the U.S. often hold festivals to show what makes them special. In California, for example, farmers near Fresno celebrate their figs and those around Gilmore showcase their garlic. Mike O'Sullivan reports that the wine-producing region of Temecula offers local vintages in an annual festival where rides on hot-air balloons add to the excitement.
    Video

    Video US Elementary School Offers Living Science Lessons

    Zero is not a good score on a test at school. But Discovery Elementary is proud of its “net zero” rating. Net zero describes a building in which the amount of energy provided by on-site renewable sources equals the amount of energy the building uses. As Faiza Elmasry tells us, the innovative features in the building turn the school into a teaching tool, where kids can't help but learn about science and sustainability. Faith Lapidus narrates.

    Special Report

    Adrift The Invisible African Diaspora