Asian stocks fall amid stimulus withdrawal jitters
Most Asian stock markets fell on Thursday amid a big drop in oil prices and as investors worried that support measures for the fragile global economy will be withdrawn too quickly.business Updated: Sep 24, 2009 12:01 IST
Most Asian stock markets fell on Thursday amid a big drop in oil prices and as investors worried that support measures for the fragile global economy will be withdrawn too quickly.
The declines came after the Federal Reserve kept interest rates unchanged at a regular meeting in Washington Wednesday, as widely expected, and said the pace of economic activity has "picked up" since its last meeting in August.
But the Fed also said it said it would again slow some of its purchases of mortgage-backed securities, which have been part of the extraordinary support the central bank has given the US economy over the past year.
Investors have focused on when central bankers and governments will begin to unwind some of the measures they have taken to boost the global economy since the onset of the global financial crisis one year ago.
"I think people get scared when the central bankers talk about the withdrawal from the market," said Francis Lun, general manager at Fulbright Securities Ltd. in Hong Kong "I think investors got coddled by the government for too long."
Hong Kong's Hang Seng index was Asia's biggest loser, falling 592.98, or 2.8 percent to 20,102.54. South Korea's Kospi declined 24.56, or 1.4 percent, to 1,686.91.
Most other markets also lost ground, including China's Shanghai index, which fell 1.4 percent, and Australia's benchmark, down 0.8 percent.
Japan's Nikkei 225 stock average, closed for the first three days of this week due to a string of national holidays, was Asia's biggest bright spot, gaining 89.32, or 0.9 percent, 10,459.86 In New York on Wednesday, the Dow Jones industrial average fell 81.32, or 0.8 percent, to 9,748.55. Broader indices also declined.
Oil prices were lower in Asia after falling nearly 4 percent Wednesday after an unexpected jump in US crude inventories suggested consumer demand remains in the doldrums. Benchmark crude for November delivery was down 64 cents at $68.33. The dollar fell to 90.78 yen from 91.43 yen. The euro rose to $1.4721 from $1.4707.