Asian markets tumble
Auto bailout rejection sends shivers through investors
BANGKOK, Thailand – Asian markets plunged today as a U.S. government rescue of Detroit’s ailing automakers collapsed in the Senate and the perilous state of the world economy was underlined by more dire economic data and deep job cuts in the United States.
Japan’s Nikkei 225 stock average was down 491.33 points, or 5.6 percent, to 8,229.22 and Hong Kong’s Hang Seng index slid 6.9 percent to 14,537.21. South Korea’s Kospi fell 4.5 percent while markets in Singapore, Australia and India fell between 2 percent and 4 percent.
The dollar fell below 90 yen and oil also dropped below $46 a barrel.
Investors were rattled after a $14 billion bailout for Detroit’s struggling Big Three automakers failed on a procedural vote. The collapse came after bipartisan talks on the auto rescue broke down over Republican demands that the United Auto Workers union agree to steep wage cuts by 2009 to bring their pay into line with Japanese carmakers.
The bankruptcy of any of U.S. automaker would deal another major blow to the American economy, already in recession, and ripple through export-dependent Asia, as well as global financial markets.
“Even though China’s government has been announcing plans to support the markets and the economy, Asia would follow Wall Street down,” said Jackson Wong, investment manager at Tanrich Securities in Hong Kong.
Auto stocks in Asia plummeted on the news. In Tokyo, Toyota Motor Co. dived 10.6 percent and Honda Motor Co. slid 12.9 percent. South Korea’s Hyundai Motor Co. shed 8.5 percent and Kia Motors Corp. was off 8.4 percent.