Asian stocks mixed after clawing back heavy morning losses
HONG KONG (AFP) — Asian shares ended mixed Tuesday as they clawed back heavy morning losses on optimism for a round of interest rate cuts following a slash in the official figure in Australia.
Regional markets plummeted early on after overnight losses in Wall Street and Europe, but Australia's central bank provided a rare dose of positive news, sparking hopes policymakers in other countries could follow suit.
Tokyo briefly tumbled five percent, dropping below 10,000 points for the first time in more than four years on fears that government efforts to end the crisis may be too little, too late.
The Nikkei finally closed 3.01 percent down. Other markets that started the day on a low also eased back on the news from Australia, where the Sydney bourse finished 1.7 percent higher after opening more than 3 percent down.
The larger-than-expected one percent rate cut was the biggest in Australia since 1992.
Seoul, Singapore and Taipei, which also opened lower, managed to end the day in positive territory. Shanghai was 0.73 percent off while Hong Kong was closed for a public holiday.
Dealers were taking the lead from Wall Street, where overnight the Dow Jones fell as much as 800 points during the session, slipping below the key psychological level of 10,000 for the first time since 2004.
But it pulled back, closing down 369.35 points, or 3.58 percent, at 9,955.50.
In Tokyo, hopes for an interest rate cut were dashed when the central bank said it would hold its figure at 0.5 percent. Its governor later played down any moves for a co-ordinated cut between nations to help ease the financial crisis.
The bank did, however, pump an extra one trillion yen (9.7 billion dollars) into the market for the 15th straight business day in a bid to keep liquidity.
The rollercoaster markets were also reflected in the price of oil, with crude hanging below the 90 dollar mark as stocks fell, before lifting later.
In late afternoon trade New York's main contract, light sweet crude for November delivery, rose 3.25 dollars to 91.06 dollars after a plunge of 6.07 dollars to 87.81 at the close of floor trading on Monday in New York.
World markets have been erratic over the past few days despite lawmakers in Washington giving the green light to a 700-billion-dollar rescue package for the US financial system.
The crisis earlier this week began to take hold in Europe, where EU ministers were forced into a special session to find a way out of the mess.
In other Asian markets, Manila ended three percent down, Mumbai fell 0.9 percent, Jakarta was 1.8 percent off after the government hiked interest rates to fight inflation, while Kuala Lumpur was flat. Bangkok ended 4.18 percent lower and Wellington was 1.45 percent down.
TOKYO: Japanese stocks closed 3.03 percent lower, dealers said.
The Tokyo Stock Exchange's benchmark Nikkei-225 index dropped 317.19 points to 10,155.90, the lowest closing level since December 2003. The index had tumbled more than five percent at one point.
The broader Topix index of all first section shares slid 21.44 points, or 2.15 percent, to end at 977.61.
"The market is still panicky," Credit Suisse strategist Satoru Ogasawara said. "Many people are simply dumping shares."
Traders were looking for any signs that authorities may take coordinated action to try to quell the turmoil, and in particular whether they will slash interest rates to shore up market confidence and global economic activity.
"We are seeing flight to quality from riskier assets. Some people might be picking up bargains, but there is no telling how long they will hold onto the shares they bought at low prices," said Credit Suisse's Ogasawara.
Toyota Motor dropped 4.8 percent to 3,710 yen and Honda Motor fell 5.0 percent to 2,570 yen.
Sharp sank 9.3 percent to 910 yen after the company slashed its net profit forecast for this fiscal year due to weak sales of mobile telephone handsets.
