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Asian Markets Get Hammered, Japan Sheds 2.8%

CNBC.com
Friday, 5 Sep 2008 | 5:17 AM ET

Fears about economic growth and a 3 percent slump on Wall Street sent Asian markets sprawling Friday, with investors sought safe-haven bonds and unwound currency carry trades, lifting the yen to a 13-month high versus the euro.

Wall Street suffered its steepest decline in more than two months after weekly government data showed an unexpected jump in the number of filings for jobless benefits, souring the mood before Friday's August jobs report, which is expected to show the eighth consecutive decline, with 75,000 jobs lost.

A collapse in the carry trade saw the yen surge in Asian trade, fueled by the fall in equities, while the U.S. dollar hit a 2008 high against the euro. Crude oil continued its decline and is trading at the $108 a barrel level, pressured by the rising dollar.

Japan's Nikkei 225 Average fell 2.8 percent to a 5-½ month closing low, as investors dumped a wide range of shares on growing gloom about the global economy.
The market was hit by a broad sell-off from the opening, following a tumble on Wall Street after of U.S. labor market data fueled nervousness about an upcoming non-farm payrolls report for August. Sony tumbled 4.2 percent after it launched a voluntary recall of 438,000 Vaio portable computers, citing a potential hazard that could cause them to overheat in one of the biggest computer recalls since 2006.

South Korea's KOSPI shed 1.5 percent with exporters retreating on global economy worries, but Samsung Electronics climbed 1.2 percent on speculation it could make a bid for U.S. memory maker SanDisk.

Australian shares fell 2.06 percent on concerns over global economic health, with miners and financial firms leading the declines.

Hong Kong shares fell 2.2 percent with the Hang Seng Index sinking below 20,000 points for the first time in over a year, after the negative U.S. jobless data dampened confidence in a global economic revival.

Singapore's Straits Times Index closed down nearly 2 percent after it hit a 23-month low on fears of a slowing global economy. Property heavyweight City Developments dropped 3.5 percent, while top lender DBS Group was 1.8 percent lower. Asian shares have fallen to new lows as further signs of a slowing global economy hit sectors, such as technology, that rely on exports.

China's Shanghai Composite Index slipped more than 3 percent to its lowest in over 20 months on news that regulators would review an IPO planned by top-10 brokerage Merchants Securities. The drop brought the index below 2,245 points, its high in 2001, previously considered a strong technical support level. The market has been depressed in part by worries about supplies of new shares, as well as concerns about a slowdown in the growth of the economy and corporate earnings.