World stocks sink amid anxiety over global economy

HONG KONG – Asian stock markets sank yesterday, with Japan’s benchmark tumbling to a 26-year closing low, amid deepening anxiety that economies in the US and elsewhere will take far longer to emerge from recession. European shares opened lower.

Investors continued to shun banks on worries the financial sector still hasn’t raised enough capital to make up for its massive losses on bad assets. Heavyweight lender HSBC, Europe’s largest bank, plunged over 24 per cent in Hong Kong trade, and Lloyds Banking Group tumbled more than 10 per cent in Britain.Japanese shares, already among Asia’s worst performing this year, crumbled further after the world’s second-largest economy posted a record current account deficit in January, its first in 13 years. Oil prices, meanwhile, were higher ahead of an anticipated production cut from OPEC.Recent losses in Asian markets, while somewhat tame compared to those in the West, have still been severe as investors ratchet down their expectations for global growth in the face of abysmal economic data and signs of ongoing struggles at banks and major firms like General Motors.’Sentiment is terrible,’ said Ben Pedley, managing director of LGT Investment Management Ltd. in Hong Kong. ‘We’re going to be in a funk, not only in Asia, but in the rest of the world for the next year or two.’Losses extended to early trade in Europe, where Britain’s FTSE 100 fell 1,4 per cent, Germany’s DAX shed 1,6 per cent and France’s CAC-40 was off 2,2 per cent. Confidence in the financial sector eroded even further after Lloyds said over the weekend the government would take a controlling stake in the company.Also weighing on Hong Kong were steep falls in mainland markets, where investors booked some profits after the government didn’t announce new and bigger policies to stimulate the economy at an ongoing legislative meeting. Shanghai’s benchmark plummeted 3,4 per cent.Stock measures in India, Singapore and Taiwan also fell; those in South Korea and Australia gained 1,6 per cent and 0,3 per cent respectively.Friday in New York, Wall Street ended a volatile session slightly higher after investors digested news that the world’s largest economy shed 651 000 jobs last month. The unemployment rate jumped to a 25 year high of 8,1 per cent.Banks were among the day’s biggest losers in Asia. The region’s financial firms are in generally better shape than their Western peers, but investors still worry about the impact of overseas lenders on Asia’s economy and its financial sector.In Hong Kong, the broader market was dominated by the downward spiral of HSBC Holdings PLC. The British lender dived 24 per cent to HK$33,3 – its lowest point in over a decade – ahead of its offering of new shares to raise capital. Just last year, its stock traded above HK$130.In Japan, lender Shinsei Bank Ltd. Lost 8,8 per cent after saying Friday it will issue preferred shares to shore up its capital base.In the oil market, benchmark crude for April delivery rose 68 cents to US$46,19 a barrel in Asia as investors anticipated another Opec production cut will shrink global supplies. -Nampa-AP