CHINA / National

Wall Street drags down Asia shares
(China Daily)
Updated: 2006-05-19 07:51

Asian stocks tumbled Thursday as a sharp drop on Wall Street overnight and expectations of higher US interest rates sent jitters through the region's markets.

In Japan, the region's biggest bourse, shares declined for the seventh time in eight days, dragged down by auto and electronics issues. The Nikkei 225 index shed 220.49 points, or 1.35 per cent, to finish at 16,087.18 points on the Tokyo Stock Exchange the lowest close since March 9.

In Hong Kong, the blue-chip Hang Seng Index fell 349.03 points, or 2.10 per cent, to 16,266.52.

The market was also down because investors were selling their holdings to free up cash for upcoming initial public offerings, including next week's US$9.9 billion offering by Bank of China, analysts said.

Taiwan shares fell, led by technology and financial stocks. The Weighted Price Index of the Taiwan Stock Exchange dropped 82.8 points, or 1.2 per cent, to 7,034.03.

The Chinese mainland's share prices were mixed, as Shanghai's main index fell on selling of nonferrous metal stocks by investors rushing to lock in recent gains.

The benchmark Shanghai Composite Index fell 0.5 per cent to 1,617.28 after dropping as much as 2.6 per cent during the day. The Shenzhen Composite Index climbed 0.4 per cent to 401.01.

India's benchmark index plummeted 6.8 per cent, Indonesian stocks fell 4.2 per cent, and Australia's market had its biggest one-day drop since October.

The falls came after Wall Street tumbled 1.88 per cent to 11,205.61, a one-month low. The drop was triggered by concerns that an increase in consumer prices meant more US interest rate hikes, which could slow economic growth and demand for Asia's exports.

However, Wall Street yesterday bounced back. In early trading, the Dow Jones industrial average gained 18.17, or 0.16 per cent, to 11,223.78.

Agencies


(China Daily 05/19/2006 page1)