Asian stocks slide as Europe's financial crisis deepens
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Asian stock markets suffered another mauling in early trade on Monday as doubts grew about whether a Wall Street bailout package will stem the global financial crisis, dealers said.
Investors were spooked by signs of escalating problems among European banks, after Germany's fourth biggest bank had to be rescued over the weekend.
Tokyo's Nikkei index tumbled 3.60 percent to hit a four-year low. Hong Kong shares sank 2.9 percent at the open, Shanghai dropped 2.7 percent, Sydney was down 3.2 percent and Seoul lost 2.7 percent.
In an effort to keep credit flowing, Japan's central bank pumped emergency funds into the short-term money market for a 14th straight business day, pouring in 1.0 trillion yen ($9.5 billion) in the morning.
Investors dumped shares after US stock markets fell sharply Friday, despite US congressional approval of a $700 billion bank bailout.
Dealers said that the declines reflected worries that the plan would not be a panacea for the broad economic and banking woes in the United States.
"In retrospect, the passage of the bill will be seen as the easy part of the process, as the rescue bill won't prevent a US economic slowdown/recession," warned analysts at RBC Capital Markets.
Underscoring the worsening conditions in the world's largest economy, 159,000 US jobs were lost in September, according to government figures.
Investors were bracing for another weak session on Wall Street when trading resumes there, said Toshihiko Matsuno, deputy equity general manager at SMBC Friend Securities.
"Those shares that had been bought up, and the sectors that are directly affected by the current financial situation, are being sold again," Matsuno said.
As the US-born financial crisis takes a stronger grip in Europe, BNP Paribas announced on Sunday that it was taking control of ailing financial group Fortis's operations in Belgium and Luxembourg.
The leaders of France, Germany, Italy and Britain vowed over the weekend to protect fragile banks but did not discuss a European financial rescue package.
Markets were looking ahead to a meeting on Friday of finance chiefs from the Group of Seven rich nations, waiting for any announcements on coordinated action such as liquidity injections or interest rate cuts, dealers said.
"Panics can stop as quickly as they start if something occurs to change dramatically people's expectations. Coordinated financial policy easing seems to us the most likely candidate for that," ING analysts told clients.
A speech on Tuesday by US Federal Reserve Chairman Ben Bernanke will also be closely watched for any clues on the possibility of a US interest rate cut.
On the foreign exchange market, the euro fell to a 13-month low against the dollar, hit by the signs of escalating financial turmoil in Europe.
The single European currency dropped to as low as 1.3610 dollars in early Asian trade, down from 1.3781 in New York late Friday. The dollar fell to 104.42 yen from 105.27.
Investors were spooked by signs of escalating problems among European banks, after Germany's fourth biggest bank had to be rescued over the weekend.
Tokyo's Nikkei index tumbled 3.60 percent to hit a four-year low. Hong Kong shares sank 2.9 percent at the open, Shanghai dropped 2.7 percent, Sydney was down 3.2 percent and Seoul lost 2.7 percent.
In an effort to keep credit flowing, Japan's central bank pumped emergency funds into the short-term money market for a 14th straight business day, pouring in 1.0 trillion yen ($9.5 billion) in the morning.
Investors dumped shares after US stock markets fell sharply Friday, despite US congressional approval of a $700 billion bank bailout.
Dealers said that the declines reflected worries that the plan would not be a panacea for the broad economic and banking woes in the United States.
"In retrospect, the passage of the bill will be seen as the easy part of the process, as the rescue bill won't prevent a US economic slowdown/recession," warned analysts at RBC Capital Markets.
Underscoring the worsening conditions in the world's largest economy, 159,000 US jobs were lost in September, according to government figures.
Investors were bracing for another weak session on Wall Street when trading resumes there, said Toshihiko Matsuno, deputy equity general manager at SMBC Friend Securities.
"Those shares that had been bought up, and the sectors that are directly affected by the current financial situation, are being sold again," Matsuno said.
As the US-born financial crisis takes a stronger grip in Europe, BNP Paribas announced on Sunday that it was taking control of ailing financial group Fortis's operations in Belgium and Luxembourg.
The leaders of France, Germany, Italy and Britain vowed over the weekend to protect fragile banks but did not discuss a European financial rescue package.
Markets were looking ahead to a meeting on Friday of finance chiefs from the Group of Seven rich nations, waiting for any announcements on coordinated action such as liquidity injections or interest rate cuts, dealers said.
"Panics can stop as quickly as they start if something occurs to change dramatically people's expectations. Coordinated financial policy easing seems to us the most likely candidate for that," ING analysts told clients.
A speech on Tuesday by US Federal Reserve Chairman Ben Bernanke will also be closely watched for any clues on the possibility of a US interest rate cut.
On the foreign exchange market, the euro fell to a 13-month low against the dollar, hit by the signs of escalating financial turmoil in Europe.
The single European currency dropped to as low as 1.3610 dollars in early Asian trade, down from 1.3781 in New York late Friday. The dollar fell to 104.42 yen from 105.27.
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