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

Photogallery Pistorius Sentenced, Taken to Prison

Pistorius, convicted of culpable homicide in shooting death of girlfriend Reeva Steenkamp, will likely serve about 10 months of five-year sentence, before completing it under house arrest More

UN to Aid Central Africa in Polio Vaccinations

Synchronized vaccinations will be conducted after Cameroon reports a fifth case of the wild polio virus in its territory More

WHO: Ebola Vaccine May Be in Use by Jan.

WHO assistant director Dr. Marie Paule Kieny says clinical trials of Ebola vaccines are underway or planned in Europe, US and Africa 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.
After Decades of Pressure, Luxembourg Drops Bank Secrecy Rulesi
X
October 21, 2014 12:20 AM
European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.
Video

Video Young Nairobi Tech Innovator on 'Track' in Security Business

A 24-year-old technology innovator in Nairobi has invented a tracking device that monitors and secures cars. He has also come up with what he claims is the most robust audio-visual surveillance system yet. As Lenny Ruvaga reports from the Kenyan capital, his innovations are offering alternative security solutions.
Video

Video Latinas Converting to Islam for Identity, Structure

Latinos are one of the fastest growing groups in the Muslim religion. According to the Pew Research Center, about 6 percent of American Muslims are Latino. And a little more than half of new converts are female. VOA’s Carolyn Presutti travelled to Miami, Florida -- where two out of every three residents is Hispanic -- to learn more.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video North Carolina Emerges as Key Election Battleground

U.S. congressional midterm elections will be held on November 4th and most political analysts give Republicans an excellent chance to win a majority in the U.S. Senate, which Democrats now control. So what are the issues driving voters in this congressional election year? VOA National Correspondent Jim Malone traveled to North Carolina, one of the most politically competitive states in the country, to find out.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.

All About America

AppleAndroid