Asian markets plunge on growing fear for the financial sector (AP) (18-09-2008)

HONG KONG - Asian stocks plunged on Thursday, on the back of Wall Street declines as investors feared more companies could succumb to the global financial crisis that forced the U.S. to bail out troubled insurer American International Group Inc.

No regional benchmark could escape falling deeply in the red.

Hong Kong's Hang Seng Index led the region's losses, tanking 1,272.86 points, or 7.22 percent, to 16,364.33 — its lowest level in over two years.

In Japan, the Nikkei 225 stock index was down 445.67 points, or 3.79 percent, at 11,304.12. Australia's S&P/ASX200 index fell more than 3.5 percent, South Korea's Kospi lost 3.6 percent and Shanghai's index fell 5.8 percent.

Far from being reassured by the Federal Reserve's $85 billion loan to AIG, investors turned skittish, completely losing their confidence. It was the latest financial giant to fall in a historic financial crisis on Wall Street that's already claimed investment banks Lehman Brothers and Merrill Lynch.

As equities markets staggered, investors fled to gold, seen as a safe haven in times of trouble. Gold for December delivery rose as much as $90.40, or 11.6 percent, to $870.90 an ounce in after-hours trading on the New York Mercantile Exchange after jumping $70 to settle at $850.50 in the regular session.

Oil rose above $97 in Asian trade Thursday, extending its big gains overnight. The dollar was little changed at 104.32 yen and the euro rose to $1.4345.

Financial stocks across Asian went into a tailspin. Japan's three megabanks fell hard: Mizuho Financial Group, Inc. sank 7.2 percent, Mitsubishi UFJ Financial Group, Inc. shed 4.6 percent, and Sumitomo Mitsui Financial Group retreated 7.4 percent.

Leading China lender Industrial & Commercial Bank of China Ltd, or ICBC, fell over 5 percent in Hong Kong.

Macquarie Group Ltd., Australia's biggest investment bank and securities firm, took an 18 percent nosedive.

Major exporters including auto makers and electronics firms also wilted, hurt by a sagging dollar and slowing overseas markets.

Source: AP