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Crashwave sweeps share bazaars worldover

Compiled from despatches by Star Business Desk
In its worst single-day drop. New York’s Dow Jones Indus trial average tumbled by 550 points Monday in a US$600 billion sell-off that prompted the stock market to shut down for the first time since safe-Suards were put In place after te 1987 disaster.
While the crash contaminated the rest of the world, some analysts in New York attributed it partly to panic over East Asia's recent reversals and partly to long-awaited correction to prices that had been soaring irrationally high.
In Asia. Hong Kong led the rout with a 13.7 per cent plunge the next day.
For Japan, the worldwide
stock tumble was the latest in a series of difficulties spanning the 1990s. known as the 'burst of the bubble economy".
The crashwave caught Europe in similar fashion.
Frankfurt. Germany's financial centre, topped with a 11 per cent dive. London, Europe's financial capital, lost 8.36 per cent. Paris plummeted by seven percent.
In Amsterdam . the loss was to the tune of 8.7 per cent, while in Russia, trading came to a standstill for three hours.
The greenback suffering its worst drop against the German mark in two and half months and lost its entire day's gain to end flat versus the Japanese yen
and declined to a three-month low against the British pound following the record fall of the Dow.
The degree of stock disaster beat all past records. Dow. the US markets best-known ba rometer, fell 554.26 points surpassing the 508-point Black Monday crash of 1987 as its biggest drop ever.
On a percentage basis. Monday's 7.18 per cent drop by the Dow only ranked as the 12th biggest ever and didn't come close to the Dow’s 22 per cent loss on Black Monday, which marked its 10th anniversary slightly more than a week ago.
Still, the selloff put the Dow’s losses at about 900 points
over the past four sessions and 1.100 points since it set a record high at 8.259.31 on Aug 6.
"It's a bloodbath." said Arnold Kaufman, a market analyst at Standard and Poor's. "It scares you because when you get a decline this fast, there's a risk it will keep snowballing."
The stock market’s drop amounted to a 600.04 billion dollars loss Monday, shrinking its value to 8.537 trillion dollars as measured by Wilshire Associates.
The Dow’s drop triggered two circuit breakers on the New York Stock Exchange that had never been set off since they were put in place after the 1987 selloff. The first circuit breaker, at 350 points, closed the market for 30 minutes. The second, at 550. halted trading for the day.
It remains to be seen how much of Monday's selling was fueled by mutual fund Investors. Publicly, however, many individual investors portrayed an unflappable facade.
"I wish I had more money to invest." said Helen Ginty, 60. a secretary in New York, asserting that she plans no change in her 225 blue chip stocks
The mounting financial crisis in Hong Kong has Ignited fears about whether global business conditions will be undermined by Southeast Asia's shaky economics, where mounting trade deficits have sent Interest rates soaring and local currencies plunging.
But with corporate profits still beating Wall Street forecasts and the US outlook on inflation and interest rates remaining favourable, many analysts concluded that the stock market had taken a turn for the better with this sharp pullback.
There was no margin for error" at the market's historically high valuations, said Larry Rice, chief Investment officer at Josephthai, Lyon and Ross. "It's
very healthy to shake some of this out. We have a very sound economy here. We re going to survive."
And once again, analysts stressed that although plenty of US companies do business in Asia. America’s financial health Is only slightly dependent on the fortunes of Southeast Asia.
"Exports to the Asian countries affected by the (financial crisis) represents less than 2 per cent of our gross domestic product." said John Shaughenessy, chief investment strategist at Advest Inc. in Hartford; Connecticut.
"I take great heart in the fact that fundamentally, the underpinning of our market is solid." said Shaughnessy. "I still view this as a nasty correction in what still remains a bull market. This is such a highly reversible. emotional event. I feel comfortable that something good will happen and turn things around
The Standard and Poor's 500-stock index, the standard against which most mutual funds are compared, tumbled 64.65 to 876.99, a loss of nearly 7 per cent.
The Nasdaq composite Index. dominated by technology companies that do more business in Asia than most other American industries, also suffered its worst one-day point drop ever, falling 115.83 to 1.535.09.
On foreign markets, the Hang Seng index fell 7 per cent in Hong Kong. Elsewhere Monday. the Nikkei fell 1.9 per cent in Tokyo, Frankfurt's DAX Index dropped 4.2 per cent, and London's FT-SE 100 fell 2.6 per cent.
Once again, though. US Treasury bonds bucked the trend as investors sought safer places to put their cash until the equity markets steady. The rise in bond prices pushed the yield on the 30-year Treasury — a key
influence on borrowing costs — fell to Its lowest level since early 1996.
Declining issues outnumbered advancers by an astounding 16-to-l margin on the New York Stock Exchange, where volume came to 685.52 million shares, the busiest day ever in the exchange's history. '
In Hong Kong, share prices tumbled 13.7 per cent in their biggest fall since the 1980s. The Hang Seng blue-chip index closed 1,438.31 points lower at 9.059.89.
It was the worst single-day drop since the global crash of 1987 and the 1989 military crackdown on protesters in Beijing, which shocked Hong Kong and provoked a 22 per cent plunge.
On Monday the Hang Seng fell 646.14 points, or 5.79 per cent. It has now lost 33 per cent 'In six trading sessions.
Hong Kong shares were already highly vulnerable because interest rates had risen- as the government moved to defend the Hong Kong dollar against speculative attack.
Brokers said investors dumped shares In reaction to the overnight rout on Wall Street, where the Dow Jones industrial average slumped 554.26. or 7.18 per cent, to 7.161.15. It was the Dows biggest point drop since the 508-^oint Black Monday crash of
In Tokyo, the benchmark 225-issue Nikkei Stock Average lost 725.67 points, or 4.26 per cent, to close the session at 16,312.69 its lowest level since July 1995. Shares of exporters which depend on strong sales tn the US market, such as Sony Corp and TDK Corp, were un-traded at the opening as sell orders overwhelmed buy offers.
In New Zealand, the benchmark NZSE40 capital index crashed 307 points or 12.45 per cent, down to 2,162. by the closeTuesday after a three-day labour weekend holiday.
Australian share prices tumbled across the board. The Sydney's All Ordinaries Index closed down 177.8 points, or 7.18 per cent, at 2,383.6.
Philippine shares also fell across the board to a record low, all Asian markets. The 30-share Philippine Stock Exchange Index dropped 117.16 points, or 6.3 per cent, to 1.740.18. Its lowest closing level since the country's two stock markets were unified in 1994.
Elsewhere:
SINGAPORE: The key Straits Times Industrials Index tumbled 7.6 per cent, or 122.87 points, to close at 1497.03, after earlier hitting a five-year low of 1486.74.
JAKARTA: The Markets
Composite Index closed down 8.6 per cent, or 42.124 points, at
BANGKOK: The Stock Exchange of Thailand index fell 6 per cent or 30.21 points to close at 460.80 in its biggest singleday drop since Jan 31.
TAIPEI: The Taiwan Stock Exchange Weighted Index closed down 452.52 points, or 5.9 per cent to 7,210.01 points, its lowest level since January.
SEOUL: The Korea Composite Stock Price Index tumbled below the 500-point level and closed at 495.28, down 35.19 Knts or 6.6 per cent, for its est level since 1992.
KUALA LUMPUR: The stock market's benchmark Composite Index plummeted 6.64 per cent, or 46.07 points, to close at 647.32.