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Latest Headlines
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Nov 26, 2009 11:47:00 PM MST
Asian stocks tumble amid Dubai debt fears; U.S. dollar slumps against yen (World-Markets)
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HONG KONG _ Asian stock markets tumbled Friday, with Hong Kong and South Korea down about 5 per cent, as fears mounted over the fallout from Dubai´s massive debt problems and the dollar continued its slide against the Japanese yen.
It was the region´s second day of losses and followed a rout in European markets. Oil, meanwhile, dived to near $74 a barrel.
Investors cut back their riskier bets on equities and commodities after Dubai World, the emirate´s main development engine, announced it was asking creditors to delay paying back its $60 billion debt.
The news triggered fears of a massive default and a wave of heavy losses at banks and companies exposed to its debt that could cause more financial pain just as the global economy is starting to recover.
Also dampening the mood was the slumping dollar, which weakened to a new 14-year low below 85 yen, dragging down shares of Japanese exporters like automaker Nissan and electronics maker Sharp.
"Investors were searching for shelter against the increased volatility and falls in risky assets," Dariusz Kowalczyk, chief investment strategist for SJS Markets in Hong Kong, said in a note. "Many chose to opt for the Japanese yen."
In Tokyo, the Nikkei 225 stock average fell 301.72 points, or 3.2 per cent, to 9,081.52. Hong Kong´s main index dived 1,111.28, or 5 per cent, to 21,099.13.
Elsewhere, South Korea´s Kospi benchmark plummeted 4.7 per cent to 1,524.50 and Australia´s index ped 2.9 per cent. China´s main Shanghai stock measure was off 2.4 per cent.
Certain banks got hit especially hard amid jitters about any losses they might suffer from their exposure to Dubai World. In Hong Kong trade, HSBC tanked 6.1 per cent and Standard Chartered fell 5.8 per cent both British-based banks have substantial Middle East operations.
Uncertainty over the ripple effects from Dubai World´s financial woes sent European markets plummeting Thursday, with benchmarks in Britain, Germany and France all losing more than 3 per cent.
U.S. markets were closed Thursday for the Thanksgiving holiday. But Friday was likely to be a rough session on Wall Stree with futures pointing sharply lower. Dow futures were down 327, or 3.1 per cent, to 10,115.
Oil prices retreated in Asian trade, with benchmark crude for January delivery falling $3.87 to $74.06 a barrel.
The dollar was lower at 86.05 yen from 86.54 yen after swooning as low as 84.81. The euro fell to $1.4850 from $1.5021.
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