The outcome of US Federal Reserve Open Market Committee (FOMC) showed that there is significant downside to the economy including strains in financial markets.
Asia/pacific market plummeted on Thursday, September 22, 2011, as investor offloaded risky assets due to more sign of deteriorating global economic health following US Federal Reserve's comments of downside risk to the US growth.
A wave of global risk aversion selloff triggered across Asia/pacific market after the Fed's downward revision to the US economic outlook. Meanwhile weak flash China manufacturing data and increasing illiquidity problem in the Euro-zone added to the gloom. Furthermore, adding to the negative sentiment was Moody's rating downgrades against three big banks, Bank of America, Citibank and Wells Fargo.
Japan stock market finished last trading session of shorten week with sour tone, with the benchmark Nikkei Stock Average tumbled 2.07% at 8,560.26 while the broader TOPIX index tanked 1.66% at 744.54, as risk aversion selling after the Fed painted a gloomier outlook for the US economy than its previous one and yen strength against the euro and the US dollar.
In Australia, the benchmark All Ordinaries index plummeted 2.62% at 4,044.70 while the S&P/ASX200 tanked 2.63% to 3,964.90, as risk battering selloff after Fed painted a gloomier outlook for the US economy. Meanwhile weak flash China manufacturing data added to the gloom. Mining and energy stocks were worst performer on fears of weakening demand, and closely followed by banks and financials, industrials, and realty developers.
New Zealand market bucked the regional falling trend, with the NZX 50 Index rose 3.45 points, or 0.1%, to 3,312.28, as the weaker kiwi dollar and Fonterra Cooperative Group's record payout offset the negative sentiment from the US market and weaker growth data. Within the index, 12 stocks rose, 26 fell, and 12 were unchanged.
In China, the benchmark Shanghai Composite index plummeted 2.78% at 2,443.06, as wave of risk aversion across the board after weak flash China manufacturing data reignited worries of sharp domestic economic slowdown. Meanwhile the Fed's downward revision to the US economic outlook further hammered risk sentiments.
Banks and financials stumbled in concerns over liquidity crunch in domestic market. The official China Securities Journal said in a report on Thursday that deposits in big four state-owned commercial banks in the first half of September fell unprecedentedly by 420 billion yuan from the end of August, adding to interbank liquidity difficulties.
In Hong Kong, the benchmark Hang Seng index plummeted 4.85% to 17,911.95, a lowest level since July 14, 2009, inline with steep fall in European and United State markets overnight and sharp losses in other Asian bourses today after weak flash China manufacturing data and the Fed's downward revision to the US economic outlook.
In India, the Bombay Stock Exchange SENSEX30 retreated 3.38% around late afternoon, falling below 16,500 levels, as investors offloaded riskier positions on concerns of global economic health after the US Federal Reserve's comments on downside risk in economic growth. Close to all sectoral indices dived in red with metal and realty plays were worst performer.
Among other Asian bourses, the Singapore Strait Times index tanked 2.66% to 2,717.66. Taiwan TAIEX index fell 3.06% to 7,305.50. The South Korea KOSPI withdrew 2.9% to 1,800.55. Malaysia KLSE lost 2.2% to 1,387.81. Indonesia Jakarta Composite index fell 8.88% to 3,369.14.
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