
HONG
KONG: Asian markets plummeted for a second straight day Friday and the
dollar rose against regional units on growing fears that the global
economy is on the verge of slipping back into recession.
Tokyo
gave up 2.07 percent by the break, Seoul dived 4.35 percent, Hong Kong
was 1.81 percent lower, Sydney lost 1.08 percent and Taiwan slumped 3.79
percent while Shanghai was 0.46 percent lower.
The Asian
sell-off followed heavy losses in the United States and Europe, which
were caused by the Federal Reserve's comments on Wednesday that the US
economy faced "significant downside risks", with the economy struggling
with slow growth, high unemployment and a depressed housing market.
The
warning came after the Fed announced a $400 billion plan to boost the
economy that would see it shift its shorter-term debt portfolio to
longer-term bonds in a bid to lower long-term interest rates, a move
that disappointed markets.
On Wall Street the Dow slumped 3.51
percent - marking its worst two-day fall since November 2008 - the
S&P 500 sank 3.19 percent and the tech-heavy Nasdaq Composite shed
3.25 percent.
The Fed's forecast piled the pressure on already
nervous investors, who were selling assets earlier in the week amid
fears Greece is on the verge of default, which could spread to other
economies and lead to another global financial crisis.
"The selloff in risk assets threatens to become disorderly," Tim Condon, economist at ING, told Dow Jones Newswires.
The dollar extended its rise against regional currencies as dealers shifted their attention away from risker assets.
The
Australian dollar was at 98.31 US cents, from $1.0017 late Thursday.
The Aussie hit a record high above $1.10 just two months ago.
The
greenback, which in recent months was languishing near record lows
against several Asian currencies, was up at Sg$1.3017 from Sg$1.2878, to
1,194.47 South Korean won from 1,179.57 and to Tw$30.61 from Tw$30.34.
The euro edged up to $1.3546, from $1.3464 late Thursday in New York, while it was also at 103.21 yen, from 102.64.
The dollar fetched 76.20 yen, from 76.25 yen.
On
oil markets New York's main contract, West Texas Intermediate for
November extended its losses, dropping $1.09 to $81.60 in morning Asian
trade, and Brent North Sea crude for November tumbled 0.85 cents to
$106.34.
Gold fetched $1,747.10 an ounce by 0200 GMT, down from the $1,765.40 it was at by 0900 GMT Thursday. (AFP)