Asian markets drop, tracking Wall Street

Updated: 2008-01-28 20:46

HONG KONG -- Global market turmoil continued into a second week as Asian markets tumbled Monday in the wake of Wall Street's sell-off Friday amid persistent worries about a possible US -- and worldwide -- economic slowdown.

China's benchmark index plummeted 7.2 percent to its lowest point in six months on concerns that a recession in the US would mean less demand for Chinese-made products.

European markets fell in early trading, and US stock index futures also were down, suggesting that Wall Street was poised to drop again when markets opened.

Investors around the world have been jittery for weeks about a US slump, which would likely weaken demand for exports and drag on global growth. There is also concern about a worldwide credit crunch triggered by rising defaults in risky US mortgages, which has led to mountains of bad assets at major American and European banks.

"There's a lot of uncertainty out there: uncertainty over the US economy, uncertainty over China's economy," said Rob Hart, an analyst with Morgan Stanley in Hong Kong.

"People are also worried about contagion in Europe. If the US slows down, will it trigger a slowdown in Europe?" he said.

In Europe, the UK's FTSE dipped 1 percent to 5,807.9 in morning trading. Germany's DAX slipped 1.2 percent while France's declined 1.7 percent.

In Asia, Tokyo's benchmark Nikkei 225 index fell nearly 4 percent to close at 13,087.91, erasing its jump on Friday, while Hong Kong's Hang Seng index sank 4.3 percent.

Declines were more modest in India, where the Sensex index -- which plunged 4 percent in the first 10 minutes of trading -- was down just 1.1 percent in late afternoon trading.

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