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Asian stocks sink amid anxiety over world economy

(Agencies)
Updated: 2009-03-09 14:07

HONG KONG – Asian stock markets sank Monday, with Hong Kong's benchmark dropping almost 2 percent, amid persistent fears that a recovery for slumping economies in the US and elsewhere is still far off.

Businessmen walk past an electronic board showing Monday's stock prices in Tokyo, March 9, 2009. Japan's benchmark Nikkei stock index lost 57.91 points, or 0.81 percent, from Friday to end morning trade at 7,115.19. [Agencies]

Investors continued to shun banks on worries they still haven't raised enough capital to make up for their colossal losses. European heavyweight lender HSBC tumbled more than 10 percent in Hong Kong trade.

Japanese shares, already among Asia's worst performing this year, crumbled further after the world's second-largest economy posted a record current account deficit in January. Oil prices, meanwhile, were higher ahead of an anticipated production cut from OPEC.

Recent losses in Asian markets, while somewhat tame compared to those in the West, have still been severe as investors ratcheted down their expectations for global growth in the face of abysmal economic data and signs major companies are struggling to survive.

"Sentiment is terrible," said Ben Pedley, managing director of LGT Investment Management Ltd. in Hong Kong. "We're going to be in a funk, not only in Asia, but in the rest of the world for the next year or two."

Japan's Nikkei 225 stock average fell 47.69 points, or 0.7 percent, to 7,125.41, and Hong Kong's Hang Seng lost 210.22, or 1.8 percent, to 11,711.30.

Benchmarks in Shanghai and India were down about 1 percent or more while stock measures in South Korea and Australia gained 1.1 percent and 0.3 percent respectively.

Friday in New York, Wall Street ended a volatile session slightly higher after investors digested news that the world's largest economy shed 651,000 jobs last month. The unemployment rate jumped to a 25 year high of 8.1 percent.

The Dow rose 32.50, or 0.5 percent, to 6,626.94. The Standard & Poor's 500 index rose 0.83, or 0.1 percent, to 683.38, while the Nasdaq composite index fell 5.74, or 0.4 percent, to 1,293.85.

Wall Street futures pointed to a lackluster open in the US Dow futures were down 1 point at 6,673 while S&P500 futures rose 0.2 point to 688.

In the oil market, benchmark crude for April delivery rose 97 cents to $46.49 a barrel in Asia as investors anticipated another OPEC production cut will shrink global supplies.

The dollar weakened to 98.22 yen from 98.27 yen. The euro traded at $1.2666 from $1.2672.