FOCUS-Wall Street rout envelops Asian markets
(Updates with more markets)
By Clarence Fernandez
SINGAPORE, Sept 1 (Reuters) - Asian stocks went down like dominoes in early trade on Tuesday as fierce sell-offs of shares in the United States and Europe drove the Tokyo market to new 12-year lows.
Japan's benchmark Nikkei average fell 3.14 percent shortly after opening, to its lowest level since March 3, 1986, but later regained some ground to 13,772.73 points, though still down 2.35 percent.
''The domino theory is being proven,'' said Paul Migliorato, senior salesman at Jardine Fleming Securities. World markets were falling in succession, one setting off the next, he said.
Markets in Australia, Hong Kong, Indonesia and Taiwan fell between three and four percent, but Malaysian shares were two percent up.
On Monday, Wall Street stocks fell 6.37 percent -- their second-largest point loss ever. Frankfurt's DAX index fell 3.2
percent.
The Dow Jones industrial average plunged more than 512 points as worries over the global economy tipped the market into a headspinning fall that erased all of this year's gain.
The equity tumble was triggered after the lower house of the Russian parliament rejected President Boris Yeltsin's choice for prime minister, Viktor Chernomyrdin.
''It's a pity. When the Dow was in perpetual rise mode, the Nikkei couldn't benefit from it,'' said Michael Wilkins, a dealer at Credit Lyonnais in Tokyo. ''Now, that the Dow has fallen quite significantly, the Nikkei is taking it to heart.''
Hong Kong's Hang Seng index slipped 3.5 percent to 7,020.61 points after opening sharply down 3.25 percent and briefly dipping below the 7,000-point limit.
''The market tumbled at the opening on Wall Street but short-covering in early trade helped the Hang Seng Index to steady at around 7,000 points,'' said Percy Au-Young, sales director at DBS Securities.
Australia's All Ordinaries took a 94-point dive, falling 3.8 percent at 2,386.7 in early trade, but later clawed back some ground and was down 2.7 percent at 2,413.6.
When the Dow plunged a record 554 points last October, the Australian market followed suit with a 177.8 point or 7.2 percent fall.
''We're looking for a final thump down... Whether last night was the final thump or not, time will tell,'' said senior dealer Stuart Smith of Henderson Charlton Jones.
The dollar stood well above its earlier low against the yen in early Tokyo, lifted by short-covering and buying by Japanese importers.
The greenback was trading at around 139.20 yen, up from its earlier low of 138.70 yen.
Wall Street's overnight fall sent Taiwan stock prices tumbling 4.38 percent to 6263.30 after plunging 3.05 in the first six minutes of trade, dealers said.
Singapore's Straits Times Index (STI) dropped 3.48 percent to 826.61 points, but later recovered slightly to trade at 837.69, or 2.19 percent down.
''Welcome to a bear market. When Wall Street comes off, everybody is going to suffer,'' one Singapore broker said.
Jakarta stocks were 4.15 percent down at 328.216 points, within minutes of opening 3.63 percent down.
Malaysian stocks fell by more than two percent at opening with the key blue chip index sliding through the psychological 300-point support level, but recovered later to 308.32 points, up 1.79 percent.
''The undertone is weak but we're seeing some good support at below 300,'' said an institutional dealer at a local brokerage. ''I think the index will stay above 300 at the close.''
The strengthening ringgit provided some underlying support, dealers said.
South Korean stocks opened slightly weaker but the impact from Wall Street and the subsequent drop in the Japanese stocks was limited, brokers said.
The Korean Composite Stock Price Index was down 0.27 percent at 309.32 points, after losing 0.77 percent in the first half hour of trading.
Retail investors were optimistic the local market would rise despite instability overseas, on hopes for government measures to boost the economy, brokers said.
biz.yahoo.com
Regards, Jeff
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