FROM SCRATCH NEWSWIRE

SCAVENGING THE INTERNET

ASIAN SHARES, OIL TUMBLE AS GLOBAL RECESSION FEARS MOUNT

Posted by Gilmour Poincaree on November 13, 2008

November 13, 2008

by Rafael Nam

HONG KONG, Nov. 13 (Reuters) – Asian shares fell on Thursday to their lowest this month on A woman walks by an electric stock average index board in Hong Kong Thursday, Nov. 13, 2008. Hong Kong's stock index has plunged over 6 percent in early trade, tracking Wall Street's sharp losses overnight. The blue chip Hang Seng index fell 923.83 points, or 6.63 percent, to 13015.28 points in the morninguncertainty about whether the United States can succeed in its massive banking rescue and as Intel Corp.’s revenue warning stoked corporate earnings worries.

European markets also opened lower and were set for another rocky ride as the Germany announced its economy officially entered recession, contracting for a second straight quarter.

Japan’s Nikkei average dropped 6.3 percent. Other markets also took a beating: South Korea, Australia, and Hong Kong fell 5-6 percent each. Taiwan and Singapore dropped 3-4 percent each.

However, Shanghai gained 1.7 percent on hopes China’s spending plan would spur economic growth.

Evaporating confidence in the global economy led crude prices to hit a 22-month low of $ 55 a barrel, even after OPEC President Chakib Khelil indicated the oil-producing cartel may cut supply again. Metals such as platinum also dropped.

In London, oil prices steadied on Thursday after falling close to 50 dollars a barrel as the International Energy Agency warns of sliding energy demand around the globe.

With prices tumbling to the lowest levels in almost two years and down almost two-thirds in value compared to record highs of above 147 dollars a barrel in July, analysts said OPEC was certain to call an emergency meeting to announce further cuts to output.

Adding to the gloom was the forecast of the Organization for Economic Cooperation and Development that leading industrialized nations appear to be in a ‘’protracted’’ downturn, with the US, Japanese and eurozone economies likely to shrink next year.

The OECD predicted a return to modest growth in 2010 but warned that the United States, the world’s largest economy, would suffer a whopping 2.8 percent contraction in fourth quarter 2008.

It called for further government stimulus measures and steps to shore up financial markets but also warned against any move that would distort competition or threaten the operation of open markets.

The Japanese yen retreated against the euro and the dollar after soaring on Wednesday on a flight-to-quality. Other Asian currencies fell, while Australia’s central bank stepped in to support its tumbling Australian dollar.

The MSCI index of Asian stocks outside Japan dropped 5.7 percent after at one point hitting its lowest level since Oct. 30.

Asian shares followed Wall Street lower after the US Treasury on Wednesday backed away from using a $ 700 billion bailout fund to buy bad mortgage debt from lenders to focus instead on buying stakes in the US banks themselves.

The shift in focus not only created uncertainty, but came after a raft of recent gloomy economic data worldwide.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘MANILA BULLETIN’ (Philippines)

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