14 May 2009

Markets tumble amid fears over US economy

10:49 pm on 14 May 2009

Asian stock markets tumbled on Thursday as signs of distress among American consumers deflated hopes for a faster end to the global recession.

Every major market in Asia was hit by sharp losses, with Japan and Hong Kong indexes down about 3%.

Investors found little to pin their hopes on after the US Commerce Department said retail sales unexpectedly dropped in April for the second straight month.

Separately, a private-sector report showed a troubling rise in home foreclosures.

Together, the reports painted a picture of a US consumer still loath to spend as unemployment increases and the recession drags on.

The news was unsettling because any recovery, particularly in export-reliant Asia, could prove elusive without a rebound in demand from US consumers, whose spending has been a lynchpin of the global economy.

Japan's Nikkei 225 stock average dropped 246.76 points, or 2.6%, to 9,093.73, and Hong Kong's Hang Seng lost 517.93 points, or 3%, to 16,541.69. South Korea's Kospi shed 2.4% to 1,380.95.

Shanghai's index lost 0.9% and Taiwan's stock measure shed 1.8%. India's Sensex fell 1.2% as the country's month-long election ended.

The Australian share market plunged more than 3% over concerns about the stability of the US economy, with falls across all sectors.

At 1615 AEST the the benchmark S&P/ASX200 index had dropped 132.7 points, or 3.44%, at 3723.4, while the broader All Ordinaries index declined 131.7 points, or 3.43%, to 3710.8.

The New Zealand market was down 35 points, or 1.2%, to 2776 on turnover of $133 million.

Top stocks all fell. Telecom was down 4 cents to $2.59, Contact Energy lost 6c to $5.99, while Fletcher Building fell 15c to $6.56.