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Asian markets down, financial worries grow

Article published on the 2008-09-16 Latest update 2008-09-16 16:35 TU

Stock prices through the window of the Nasdaq MarketSite in New York, September 15, 2008. Photo: Reuters

Stock prices through the window of the Nasdaq MarketSite in New York, September 15, 2008.
Photo: Reuters

Markets fell across Asia in Tuesday's trading. Finance and government officials gathered in Japan, Australia and South Korea to consider their response to the crisis as fears grew for financial companies that have been hit by the collapse of Lehmann Brothers investment bank in the US.

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Asian stock markets dropped in trading on Tuesday following the collapse of US investment bank Lehman Brothers on Monday.

Japan's stock exchange closed at its lowest in three years, down almost five per cent, while Hong Kong had hit a two-year low by lunchtime. In South Korea shares fell six per cent. In Australia, however markets mostly held up and were only 1.4 per cent down at closing.

Trading on the FTSE index in London fell by almost 1.5 per cent in morning business.

Concern for other financial groups grew as the share price of Bank of America fell 21 per cent after it bought Merril Lynch, a rival of Lehman.  The Japanese bank Aozora, one of Lehman's biggest lenders, lost 20 per cent of its share value and AIG, one of the top three insurer's in the world, lost more than 60 per cent.

Linda Yeuh, a markets economist at Oxford University in Britain told RFI, "...companies which take too much risk have to pay the consequences of their actions, otherwise central banks may inadvertently encourage risk-taking."

Analysis: Linda Yeuh, economist, Oxford University, Britain

 
 

16/09/2008 by Angela Diffley

Japan poured 16 billion euros into its markets, and in South Korea the value of the currency (the won) fell 4.3 per cent against the dollar. The country's financial officials called for calm, saying that the central bank would intervene if necessary

Across the region, meetings were scheduled to try and limit the fall-out from Lehman's collapse. Australia's Prime Minister Kevin Rudd met with officials from Australia's treasury and Reserve Bank as Japan's government held talks with the governor of the Bank of Japan.