Asian stocks slide after US interest rate cut
HONG KONG, Dec 12: Asian stock markets skidded lower on Wednesday, following Wall Street into the red on fears a quarter-point interest rate cut by the Federal Reserve may not be enough to ward off a US recession.
While the US central bank’s decision to trim its key federal funds interest rate by 25 basis points to 4.25 percent was in line with market expectations, dealers said some investors had been hoping for a more aggressive cut.
Markets in Asia, however, managed to recover some of their losses in late trade as investors took the view that the initial sell-off was excessive.
On Wall Street the Dow Jones index dropped 2.14 percent Tuesday in the wake of the Fed’s third interest rate cut since September to try to cushion the world’s largest economy from mortgage and credit market problems.
This in turn has led to a credit crunch, as banks become wary of lending money to each other, and higher short-term interest rates.
TOKYO: Japanese share prices closed down 0.70 per cent after a quarter-point US interest rate cut disappointed some investors on Wall Street who had been hoping for more aggressive action.
But dealers said late bargain-hunting helped the market to trim its losses as players took the view that initial heavy selling was an overreaction to the Fed’s announcement.
The Nikkei-225 index fell 112.46 points to 15,932.26. Volume traded rose to 2.12 billion shares from 1.69 billion Tuesday.
HONG KONG: Hong Kong share prices closed sharply lower, down 2.41 per cent, led by properties and banks, as investors showed their disappointment at the US Federal Reserve interest rate cut.
Hong Kong moved in line with other Asian markets which fell after the Fed cut its key rate by only 25 basis points.
The Hang Seng index closed down 705.78 points at 28,521.06, off a low of 28,343.21 and a high of 28,777.28. Turnover was 117.27 billion Hong Kong dollars (15.04 billion US).
SYDNEY: Australian share prices closed sharply lower, tracing losses on Wall Street on disappointment at the size of the Federal Reserve’s interest rate cut.
The S&P/ASX 200 recovered closed down 65.2 points at 6,615.2. Volume traded was 1.53 billion shares worth 5.92 billion dollars (5.19 billion US).
SINGAPORE: Singapore share prices closed 1.11 per cent lower in line with regional falls after a key US interest rate decision.
Dealers said the Federal Reserve’s quarter percentage point cut to US interest rates disappointed investors looking for more decisive action.
The Straits Times Index finished 39.78 points lower at 3,549.25 on volume of 1.45 billion shares worth 1.73 billion Singapore dollars (1.20 billion US).
KUALA LUMPUR: Malaysian share prices closed 0.7 per cent lower as US policymakers disappointed Wall Street with a quarter-point cut in its federal funds target rate, dealers said.
The composite index closed down 10.44 points at 1,423.72.cut,” said Sukit Udomsirikul, a market analyst at Siam City Securities.
JAKARTA: Indonesian share prices closed 0.5 per cent.
WELLINGTON: New Zealand share prices closed 0.69 per cent lower, falling in line with regional bourses as investors expressed disappointment in a modest US interest rate cut.
The NZX-50 index was down 27.40 points at 3,999.55 on turnover worth 103.53 dollars (80.15 million US).
MUMBAI: Indian share prices rose 0.42 per cent in choppy trade after a quarter-point cut in US interest rates failed to erase worries over the global economic outlook. The 30-share Sensex rose 84.98 points to 20,375.87.
The markets reacted initially to weak Asian trends. But we expect the Indian markets to show resilience and bounce back over the medium-term, said Atul Mehra, executive director at brokerage J.M. Financial.—AFP