Asian markets slide further; Nikkei at 26-year low (AP) (27-10-2008)

HONG KONG (AP) -- Asian stock markets resumed their slide Monday, with Japan's Nikkei stock index falling to a 26-year low, as government rescue measures failed to ease fears of a prolonged global recession.

Investors were scared to wade back into equities, worried a stream of economic data from the U.S. this week could bring more bearish news about the world's largest economy and trigger another round of selling, analysts said. Selling by investment managers, bracing for another wave of redemptions, also fed the declines, they said.

Tokyo's Nikkei 225 index, after trading higher in the morning, closed down 6.4 percent to 7,162.90 -- the lowest since October 1982. Hong Kong's Hang Seng Index tumbled more than 12 percent to 11,099 points.

 In South Korea, the central bank slashed its key interest rate Monday by three-quarters of a percentage point -- its biggest cut ever -- to prevent Asia's fourth-largest economy from lurching into recession.

Australian and Hong Kong central bankers injected funds into their markets to ensure liquidity. Japan's prime minister urged officials to draw up measures to calm volatile stock markets and to fend off further fallout from the crisis.

In Europe, the International Monetary Fund said Sunday it had reached a tentative agreement to provide Ukraine with $16.5 billion in loans and announced that emergency assistance for Hungary had cleared a key hurdle.

The benchmark Kospi ended 0.8 percent higher at 946.45.

In mainland China, the benchmark index slumped to its lowest level in more than two years as investors reacted to dismal earnings reports. The Shanghai Composite Index lost 6.3 percent, or 116.27 points, to 1,723.35. It is now down about 72 percent from its peak about a year ago.

In the Philippines, the key index plummeted 12.3 percent to 1,713.83 points, triggering a circuit-breaker that automatically halted trading for 15 minutes.

Tuesday's U.S. Federal Reserve meeting was more cause for caution. The central bank is expected to lower interest rates by at least a half-point to 1 percent, though the rate reduction is already priced into the market and unlikely to calm its restlessness.

 By Monday morning, stock index futures were down sharply, signaled a moderately lower open, with Dow futures down 279 points, or 3.4 percent, at 7,980. S&P and Nasdaq futures were also lower by more than 3 percent.

In Japan, stocks fell despite a report that the government was considering massive capital injection into struggling banks in a bid to calm jittery financial markets.

Citing unidentified sources, the Yomiuri newspaper said Monday the government is considering injecting public money worth 10 trillion yen ($108 billion) into struggling banks in a bid to stabilize the financial market hit by sagging stocks and a soaring yen.

Investors in Japan dumped exporters like Toyota Motor Corp. and Sony Corp. as the yen remained strong after hitting a 13-year high of 90.89 yen on Friday.

Source: AP