Asian Markets Tumble on Lehman Woes
Asian markets -- the few of them that were opened today -- fell sharply as U.S. investment bank Lehman Brothers filed for bankruptcy, dragging down financials. Moves were likely exaggerated as trading activity is limited by market holidays across the region, including in Japan, Hong Kong, China and South Korea. These markets will reopen Tuesday.
In related news, Merrill Lynch agreed to be acquired by Bank of America for $29 a share, or roughly $50 billion, after being pressured into a deal by federal regulators.
Fears of Lehman's bankruptcy sent shock waves through the market, and saw the U.S. dollar post its largest one-day fall against the euro in six months. Crude oil futures fell below $100 as Hurricane Ike caused less damage than feared to the U.S. oil facilities in the Gulf of Mexico.
Australian shares finished 1.7 percent lower as gains in miners stemmed the market's fall. The investment banks were the worst hit, with Macquarie Group down 10 percent and Babcock & Brown down 16 percent. Mining companies, led by BHP Billiton and Newcrest Mining, helped stem the market's declines after industrial metals prices bounced on Friday and investors poured into gold as a safe haven.
Singapore's Straits Times Index tumbled over 3 percent lower as uncertainty over the failure in Lehman Brothers fueled selling in blue chips such as CapitaLand and Singapore Exchange. CapitaLand, Southeast Asia's largest property developer, was down 4 percent, while Singapore Exchange fell 2 percent. DBS Group, Southeast Asia's biggest lender, was down 1.7 percent.
Taiwan stocks fell more than 4 percent to their lowest level since November 2005, dragged by financial shares such as Cathay Financial on uncertainty about a bailout for U.S. investment bank Lehman.