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Well before the opening of Tuesday's (January 22, 2008) market open on Wall Street, it is clear that global markets are now in a panic, with a two day sell-off that can only be described as a CRASH.

Here is the latest global market news at 1:30 AM EST:

Asia Stocks Fall, Extending Global Slump as Bear Market Spreads

By Chua Kong Ho and Chan Tien Hin
Bloomsberg.com

Jan. 22 (Bloomberg) -- Asian stocks tumbled the most since September 2001, extending a global slump that has wiped more than $5 trillion from stock markets this year on concern world economic growth is faltering.

The MSCI Asia Pacific Index tumbled 6.3 percent, taking its drop from a November high to 22 percent and following Europe into a bear market. BHP Billiton Ltd., the world's biggest miner, fell along with metals and oil prices. Toyota Motor Corp. led declines in Asia after European shares plunged 5.7 percent. Standard & Poor's 500 Index futures pointed to a 4.8 percent tumble when U.S. trading starts.

``We're in panic territory,'' said Patrick Chang, who helps manage $4.5 billion at CIMB-Principal Asset Management Bhd. in Kuala Lumpur. ``The markets are pricing in a recession. We won't see a bottom for the next one to two weeks.''

Japan's Nikkei 225 Stock Average sank 4.8 percent to 12,682.41, the lowest since September 2005. Hong Kong's Hang Seng Index dived 8 percent, headed for the biggest two-day drop since October 1997. Australia's S&P/ASX 200 Index fell 5.8 percent, the most in a decade. India's Sensitive Index plunged 9.8 percent, triggering a market halt.

Asia's MSCI index slumped to 132.34 at 2 p.m. in Tokyo, the most since September 12, 2001. More than 1,000 of its 1,142 members fell and all indexes open declined.

S&P 500 Index futures were recently at 1,262.40 in after-hours trading in Chicago, compared with the index's close of 1,325.19 on Jan. 18. That would bring the index's drop from its October high to 20 percent, a level that defines a bear market. U.S. markets were closed yesterday for the Martin Luther King public holiday.

`Crash'

Europe's Dow Jones Stoxx 600 Index sank 5.7 percent yesterday, pushing it into a bear market.

BHP fell 6.3 percent to A$31.20, taking this year's fall to 22 percent. Rio Tinto Group, defending a takeover bid from BHP, lost 12 percent to A$101.02, the steepest drop since December 1987.

``This has been a crash and it might take a year to get back to where it was last week,'' said Michael Birch, who helps manage the equivalent of $140 million at Wallace Funds Management in Sydney. ``It might be the second half of the year before people have the confidence to weigh back in.''

Inpex Holdings Inc., Japan's largest oil producer, dropped 8.7 percent to 922,000 yen. PetroChina Co., the nation's largest oil explorer and the first company to exceed $1 trillion in stock value, sank 12 percent to HK$9.96. PetroChina has tumbled by almost half since its Nov. 1 record high, stripping more than $600 billion from its market worth.

Crude oil traded near a five-week low at $88.17 after oil for February delivery declined 2.1 percent yesterday. A measure of six metals traded on the London Metal Exchange, including copper and zinc, slid 3.4 percent yesterday, the most in two months. Energy and materials stocks were the two biggest percentage decliners on the MSCI regional benchmark.

Investors Switching

Fortescue Metals Group Ltd., Australia's fourth-largest mining company by market value, plunged 14 percent to A$4.88, taking its slide from a Dec. 28 record to 43 percent.

``The mood in the market continues to be bearish,'' said Hans Kunnen, who helps manage $128 billion at Colonial First State Global Asset Management in Sydney. He said investors in Colonial's funds have been switching from equities to cash and fixed-interest investments, declining to be more specific.

Toyota, Japan's largest automaker, dropped 4.9 percent to 5,000 yen, rounding a 17 percent 2008 fall. Sony Corp., the world's No. 2 consumer-electronics maker, declined 5.3 percent to 5,200 yen.

Samsung Electronics Co., South Korea's largest exporter, slid 3.9 percent to 542,000 won. Taiwan Semiconductor Manufacturing Co., the world's biggest maker of custom-made chips, lost 6.9 percent to NT$49.60, the biggest drag on the island's Taiex index.

`Wiped Out'

``The correction hasn't finished and will continue until the optimists have been wiped out,'' said Taku Yamamoto, who helps oversee about $107 billion at the Pension Fund Association in Tokyo.

Bridgestone Corp., the world's largest tiremaker by sales, slumped 5.1 percent to 1,560 yen, after the Nikkei newspaper reported its operating profit may drop 7 percent this year because of higher rubber prices. Hitachi Cable Ltd., a Tokyo-based cable- maker, tumbled 11 percent to 488 yen, the most in six years, after Goldman, Sachs & Co. cut it to ``neutral'' from ``buy.''

In Hong Kong, China Mobile Ltd., the world's biggest phone company, dropped 6.5 percent to HK$110.10. China Life Insurance Co., the largest insurer, plunged 15 percent to HK$28, a five-month low. China Mobile has lost almost a third of its value since its Oct. 29 high last year, while China Life has tumbled by almost half.

Reliance Industries Ltd., India's largest company, plummeted 15 percent to 2,150 rupees, the most since April 1993. ICICI Bank Ltd., the nation's biggest bank, tumbled 11 percent to 1,040 rupees, the steepest decline since September 2001.

``The bears are now in control,'' said Jonathan Ravelas, who helps oversee $3.7 billion at BDO Unibank Inc. in Manila. ``All good things must come to an end.''

To contact the reporter for this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net ; Patrick Rial in Tokyo at prial@bloomberg.net

Last Updated: January 22, 2008 00:12 EST

http://www.bloomsberg.com/apps/news?pid=20601087&sid=aLn6E6ve_p6o&refer=worldwide

* * *

Asian markets see further losses
Share prices in Asia and Australasia continued to fall sharply on Tuesday, a day after global stock indexes tumbled amid fears of a global recession.

Japan's benchmark Nikkei index plunged 1.5% in the first minute of trading.

 

South Korean shares dropped by around 5%, with Sydney's market continuing its longest losing streak for 26 years, down 7.1% on the day at the close.

 

In Bombay, India's main index fell 9.75% within minutes, triggering an automatic one-hour halt in trading.

The loss in Indian shares came after a fall of 7.41% on Monday, the Sensex's worst day ever.

 

India's Finance Minister P Chidambaram has urged the Indian investors to "remain calm" and advised them to "stay invested".

Mr Chidambaram said that "enough liquidity will be provided to the brokers to tide over the present crisis".

In Japan, during Tokyo's morning trading session, stocks tumbled more than 4%, hitting new two-year lows.

In China, the main Shanghai Composite Index fell more than 5% in early trade, while markets in Taiwan saw similar falls.

Hong Kong's Hang Seng Index was also down more than 5% by mid-morning.

The decline continued a worrying start to 2008 for Asia's markets.

So far this year, Japan's Nikkei has dropped 13%, Hong Kong's Hang Seng is down more than 14% and China's main Shanghai index has slipped almost 7%.

But the Japanese government said it saw no reason to intervene, and a Bank of Japan meeting left interest rates unchanged.

"Stock markets across the world are falling and it basically stems from the United States," said Hiroko Ota, the minister for economic and fiscal policy.

"It is difficult at the moment to mull action by Japan alone. Instead, we should cooperate globally," she said.

Global recession feared

Monday saw global stock indexes suffer their biggest slump since the terrorist attacks of 11 September 2001.

On Monday, London's FTSE 100 index tumbled 5.5% to 5,578.2, wiping £77bn ($149bn) off the value of its listed shares. Indexes in Paris and Frankfurt slumped by about 7%, while share prices in South America also dropped.

The Brazilian stock market - the largest in the region - fell by 6.6%, while Mexico's IPC index fell 5.35%.

Brazil's real dropped by 2.47% against the dollar, and Mexico's peso lost 0.85% against the US currency, registering a five-month low.

Investors questioned whether a recent plan to boost the US economy would be enough to avert a full-blown recession.

Dominique Strauss-Kahn, the head of the International Monetary Fund, said the global economic situation was "serious" and that all countries in the world were suffering in the wake of a slowdown in US growth.

Last week the US government announced a financial stimulus plan which would involve about $145bn in tax cuts to encourage spending.

US bond markets, which were closed for a public holiday on Monday, are to reopen later on Tuesday and many analysts say they could see sharp falls after markets worldwide reacted negatively on Monday.

Francis Lun of Fulbright Securities in Hong Kong said the falls stemmed from disappointment that the US stimulus was "too little, too late" adding that investors felt "it wouldn't help the economy recover".

'Panic mode'

The worry is that tax breaks and spending measures will not be enough to boost consumer spending in the US, because deeper economic problems remain.

In particular, the slowing housing market and problems in the sub-prime sector - which lends to those with limited or no credit histories - has contributed to a slowdown.

"We're falling back into the crisis of confidence in the financial sector," said Hugues Rialan, of Robeco France.

"The banks have been reassuring the market over their exposure to US mortgage-related investments, but now we realise there is nothing reassuring about it," he said.

Finance firms were among the main fallers, with Dutch ING Group, Germany's Allianz and Swiss Re all falling about 10%, while Royal Bank of Scotland shed 8%.

Many shoppers are struggling under higher mortgage repayment costs, prompting default rates to surge, especially among sub-prime borrowers.

This has prompted banks to tighten their lending policies after losing huge amounts of investments linked to the US housing and mortgage markets. The state of the US economy is crucial for many of Europe's and Asia's biggest companies because it is one of their biggest export markets.

Any slowdown in demand is likely to hurt corporate profit growth and push share prices even lower, analysts have warned.

But some analysts took comfort from the prospect of falling US interest rates. "If interest rates are cut to the extent we and others expect, the likelihood is that today's share prices will look like silly values in 12 months' time, if not before," said Mike Lenhoff at Brewin Dolphin Securities.

http://news.bbc.co.uk/2/hi/business/7201658.stm

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