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Asia stocks sink as layoffs add to global gloom

Asian stock markets sank after Wall Street retreated and global financial firms announced another round of massive layoffs, adding to gloom about the world economy.

business Updated: Nov 18, 2008 12:02 IST

Asian stock markets sank on Tuesday after Wall Street retreated and global financial firms announced another round of massive layoffs, adding to gloom about the world economy. Tokyo's Nikkei 225 stock average fell 194.17 points, or 2.3 per cent to 8,328.41, a day after confirmation Japan, the world's second largest economy, had slipped into a recession. Hong Kong's Hang Seng Index was 2.9 per cent lower at 13,131.23. Investors were discomforted by news the financial sector, still struggling more than a year after the subprime crisis erupted in the US and spread to Europe, continues to hemorrhage thousands of jobs.

Citigroup Inc announced overnight nearly 53,000 layoffs in the coming quarters amid massive losses from deteriorating debt tied to bad mortgages. HSBC Holdings PLC, Europe's largest bank by market value, said it plans to cut 500 jobs in Asia due to the global economic slump.

"The entire world seems to be sinking into recession," said Francis Lun, general manager of Fulbright Securities Ltd in Hong Kong. "Everyday there are corporate layoffs and economic bad news. Slowly but surely they are losing hope in markets." The Shanghai Composite index slid 6 per cent, Australia's main index declined 3.6 per cent and South Korea's Kospi fell 3.9 per cent. The lurch lower followed Wall Street, where traders sold heavily on evidence of more economic weakness and Citigroup's layoffs. The Dow fell 223.73, or 2.6 per cent, to 8,273.58, near its session low. The Standard & Poor's 500 index fell 22.54, or 2.6 per cent, to 850.75, and the Nasdaq composite index dropped 34.80, or 2.3 per cent, to 1,482.05.

Wall Street futures pointed to a lower open on Tuesday. Dow futures were down 0.3 per cent to 8237.

Across the region, wilting prices for oil, metals and other commodity sent resource companies lower. China's Sinopec Corp dropped 3.8 per cent and Australia's BHP Billiton Ltd, the world's largest miner, retreated 3.6 per cent.

Oil prices were up slightly in Asian trade, with light, sweet crude for December delivery rising 20 cents to $55.15 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore.

The contract on Monday fell $2.09 to settle at $54.95, the lowest since January 2007. Prices have fallen about 62 per cent since reaching a record $147.27 in mid-July.

In currencies, the dollar strengthened to 96.68 from 96.38 and was trading at 1.262 against the euro.

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