GO
Loading...

Asian Markets Slide as US Bailout Plan Stalls

Asian markets fell Friday as political wrangling continued to stall approval of the U.S. government's $700 billion rescue plan for the financial sector, dashing hopes of a quick recovery.

The fate of the Wall Street bailout remained unclear as a White House meeting with confrontational officials ended without an agreement and some participants said talks had hit a major snag. A person close to presidential candidate John McCain said "there is no deal" — a sentiment echoed by sources close to some Democrats involved in the negotiations.

U.S. stock market futures fell on this new development. In addition, news that JPMorgan Chase is expected to buy the deposits of Washington Mutual in a government-brokered bailout has also emerged.

The U.S. dollar weakened against the yen and Swiss franc , two currencies associated with stability, as a bipartisan deal to get what is called the Troubled Assets Relief Program turned into a law may have to wait until at least the weekend. Crude oil futures edged lower on worries over the outlook of demand.

The Nikkei 225 Average finished down 0.9 percent to its lowest close in eight days amid growing worry about the fate of a U.S. financial system bailout plan as talks stalled. Financial services firm CSK Holdings tumbled more than 9 percent after saying it would post an annual loss, hurt by the turmoil in global credit markets, while shipping firms slid again on a further fall in a key freight index.

Seoul shares closed 1.7 percent lower after a U.S. financial sector rescue plan stalled, sending exporters and banking shares down. Financials fell across the board, with Shinhan Financial Group and Woori Finance Holdings down sharply. Major exporters were also hit as the financial sector uncertainty fanned worries about the broader economy, with Samsung Electronics shedding 2.4 percent.

Australian shares fell 0.5 percent in a rocky session. Financial stocks such as investment bank Macquarie Group and miner BHP Billiton turned lower as nervous investors waited for U.S. Congress decisions on the rescue package.

Hong Kong shares dropped 1.3 percent with Ping An Insurancebattered by rumors about trouble atFortis, in which it holds a 5 percent stake. Shares in China's second-biggest insurer, dived 9.7 percent on talk that Fortis sought help from a rival bank to shore up its liquidity.

Chinese stocks fell 0.2 percent as investors took profits before next week's long national holiday. The Shanghai Composite Index had gained 3.6 percent on Thursday. Continued turmoil in the U.S. financial system with the failure of Washington Mutual added to the cautious mood among investors.

Singapore's Straits Times Index moved 1.4 percent lower. Shares of market heavyweight Singtel fell to its lowest level in 18 months, weighed down by brokerage downgrades.