Asian stocks plunge on Wall Street, Worldcom woes

Asian Economic News, July 1, 2002

SINGAPORE, June 26 Kyodo

Asian stocks tumbled Wednesday, spooked by another rout on Wall Street and news of an accounting scandal at U.S. telecom giant Worldcom.

Dealers said the sharp fall in the U.S. stock futures index unleashed panic in Asian markets, which anticipate the downward spiral on Wall Street will continue.

''There's a lot of panic selling in Asia,'' said Kostas Panagiotou, an analyst at Kim Seng Securities, a Singapore brokerage.

In Tokyo, the key 225-issue Nikkei Stock Average dropped 422.11 points, or 4.02%, to 10,074.56, its lowest finish since Feb. 20. It was the Nikkei's steepest decline this year by points.

The broader Tokyo Stock Price Index (TOPIX) of all First Section issues on the Tokyo Stock Exchange fell 32.15 points, or 3.16%, to close at 984.28, the lowest closing level since Feb. 26

In South Korea, the Composite Index posted its largest drop since last September, plummeting 7.15% to close at 701.87.

The Taiwan Stock Exchange Weighted Index also fell 3.63% to a fresh six-month low of 5,123.04.

In Hong Kong, the Hang Seng Index fell 2.4% to close at 10,355.92, the lowest level this year.

In Singapore, the Straits Times Index dived 2.15% to a six- month-closing low of 1,532.15 as investors were unmoved by surprisingly strong manufacturing output data for May, which rose 17% over the same month last year.

''It's more bloodshed, investors are jittery,'' said a dealer at a Singapore brokerage.

He said he expects the index to sink further but predicts support will emerge at around the 1,500 level.

Dealers said the recent weak data for non-oil domestic exports fueled concern the Singapore economy will take longer to recover.

Analysts said blue chips came under strong selling pressure from foreign funds.

The Malaysian stock market also fell but the index outperformed other markets by sliding 1.7% to close at 705.04, boosted by news that Prime Minister Mahathir Mohamad will stay on until late next year despite his announcement Saturday that he would resign.