Asian bourses down on US financial woes

PETALING JAYA: Asian markets went through another turbulent day as investors reacted to the continuing troubles in the US financial system, despite a rescue package for troubled quasi-sovereign mortgage providers Freddie Mac and Fannie Mae.

Investors were also reacting to fears of more bank failures in the US, thereby putting more strain on its financial system, as the Bush administration bailed out California-based IndyMac Bancorp Inc, which had become the biggest casualty of the subprime mortgage crisis thus far.

The KL Composite Index was down in line with the region’s performance. It closed 1.43% lower at 1,127.60, while in Singapore, the Straits Times Index was down 70.74 points at 2,833.38. Hong Kong’s Hang Seng Index tumbled 839.69 points to 21,174.77 while Japan’s Nikkei 225 fell 255.60 points to 12,754.56.

Other markets that were affected included Korea’s Kospi, which was down 49.29 points at 1,509.33, while in China, the Shanghai Stock Exchange fell 98.81 points to 2,779.45. The Stock Exchange of Thailand Index dropped 23.65 points to 693.41, and in Indonesia, the Jakarta Composite Index lost 44.69 points to 2,214.85.

Jupiter Securities Sdn Bhd research head Pong Teng Siew said at this juncture, domestic political troubles were playing second fiddle to global economic problems, especially if taken from the viewpoint of foreign funds.

“These funds are mainly driven by economic issues, I don’t see fund managers reading too much into the political situation unless it gets really bad,” he said.