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Asia share panic after Dow plunge Asia share panic after Dow plunge
(about 2 hours later)
Asian markets have opened heavily down in the wake of a plunge by US stocks to their lowest level for five years. Asian markets have fallen heavily after US stocks plunged to their lowest level for five years.
Tokyo's Nikkei-225 index has dropped 10%, while South Korea, Australia, Singapore and Hong Kong all crashed 7% as soon as the markets opened. Tokyo's Nikkei-225 index dropped 9.6% in its biggest one-day fall since 1987, while shares in Australia, Hong Kong and Singapore all plummeted.
Despite concerted government action, investors are fearful the financial crisis will prompt a global recession.Despite concerted government action, investors are fearful the financial crisis will prompt a global recession.
Finance ministers from the G7 leading industrial countries are set to meet in Washington to discuss the crisis.Finance ministers from the G7 leading industrial countries are set to meet in Washington to discuss the crisis.
US President George W Bush is due to make an address to the American people later in the day.US President George W Bush is due to make an address to the American people later in the day.
'Deeper panic''Deeper panic'
Heavy falls were seen across Asia's markets as a climate of fear took hold on Friday. Selling is unstoppable in New York and Tokyo. Investors were gripped by fear Yutaka MiuraShinko SecuritiesHeavy falls were seen across Asia's markets as a climate of fear took hold on Friday. Selling is unstoppable in New York and Tokyo. Investors were gripped by fear Yutaka MiuraShinko Securities
As the plummeting Nikkei-225 index faced its biggest one-day drop since Tokyo's 1987 crash, the global crisis claimed its first Japanese financial institution, with the insurance company Yamato Life going bankrupt. As the Nikkei-225 index slumped in its biggest fall in a single session since the 1987 stock market crash, the global crisis claimed its first Japanese financial institution, with the insurance company Yamato Life going bankrupt.
"Selling is unstoppable in New York and Tokyo," said Yutaka Miura, senior strategist at Shinko Securities in Tokyo."Selling is unstoppable in New York and Tokyo," said Yutaka Miura, senior strategist at Shinko Securities in Tokyo.
"Investors were gripped by fear," he told the Associated Press. "Investors were gripped by fear."
Hong Kong's benchmark Hang Seng index slumped to a three-year low, while in the Philippines, share prices closed down more 8.3%. Shanghai's index was down 3.8%. At the end of trading on Friday, Tokyo shares had plunged 24% during the week - double their weekly fall during the 1987 market crash.
In Indonesia, meanwhile, stock market trading has been suspended indefinitely in order to prevent what the president of the exchange called "deeper panic". FROM THE TODAY PROGRAMME class="" href="http://news.bbc.co.uk/today/hi/default.stm">More from Today programme
Elsewhere in Asia it has been a similar story.
Australian shares closed down 8.3%, Hong Kong's benchmark Hang Seng index slumped to a three-year low, in the Philippines, share prices closed down more 8.3% while Shanghai's index was down 3.8%.
In Indonesia, plans to re-open the stock market were suspended in order to prevent what the president of the exchange called "deeper panic". Trading was halted for two days earlier this week.
With the value of gold continuing to rise as investors seek security, oil fell below $83 a barrel to a 12-month low.With the value of gold continuing to rise as investors seek security, oil fell below $83 a barrel to a 12-month low.
'Beyond fundamentals''Beyond fundamentals'
As well as the G7 meeting, talks will be held at the International Monetary Fund (IMF) in Washington.As well as the G7 meeting, talks will be held at the International Monetary Fund (IMF) in Washington.
The organisation's chief, Dominique Strauss-Khan, said on Thursday the lending procedure would allow the IMF to react quickly to support countries facing funding problems. The IMF has said it is ready to lend to countries hit by the global credit crunch, using an emergency lending procedure first used in the 1990s Asian crisis.
The organisation's chief, Dominique Strauss-Khan, said on Thursday this would allow the IMF to react quickly to support countries facing funding problems.
The IMF has warned the financial crisis is the most dangerous since the 1930sThe IMF has warned the financial crisis is the most dangerous since the 1930s
Mr Strauss-Kahn said the world was "on the cusp of recession", but could still recover.Mr Strauss-Kahn said the world was "on the cusp of recession", but could still recover.
The IMF has about $200bn immediately available to lend to countries in need but can tap other sources.
After a gloomy day's trading in Europe on Thursday, the Dow Jones - the US benchmark index - ended down 7.3% - tumbling below 9,000 points for the first time since August 2003.After a gloomy day's trading in Europe on Thursday, the Dow Jones - the US benchmark index - ended down 7.3% - tumbling below 9,000 points for the first time since August 2003.
"We're way beyond fundamentals," said Chris Orndorff, head of equity strategy at Payden & Rygel, in Los Angeles."We're way beyond fundamentals," said Chris Orndorff, head of equity strategy at Payden & Rygel, in Los Angeles.
"This is just pure panic, that's all it is.""This is just pure panic, that's all it is."
Iceland missionIceland mission
The IMF scheme, which was used during the Asian financial crisis in 1997, would help speed up approval of loans. The IMF has already sent a mission to Iceland, where the government has taken control of its three biggest banks.
The body has already sent a mission to Iceland, where the government has taken control of its three biggest banks. There is no domestic solution to a crisis like this one Dominique Strauss-Kahn, IMF managing director class="" href="/1/hi/business/7647015.stm">Time to reform the IMF? class="" href="/1/hi/business/7659086.stm">'Major global downturn' says IMF class="" href="/1/hi/business/7660568.stm">Stocks falter as fears persist class="" href="http://www.bbc.co.uk/blogs/thereporters/robertpeston/">Robert Peston's blog
There is no domestic solution to a crisis like this one Dominique Strauss-Kahn, IMF managing director Time to reform the IMF?'Major global downturn' says IMFStocks falter as fears persist
Speaking ahead of meetings of the IMF and World Bank, Mr Strauss-Khan urged countries to act "quickly, forcefully, and co-operatively" to solve the global economic problems.Speaking ahead of meetings of the IMF and World Bank, Mr Strauss-Khan urged countries to act "quickly, forcefully, and co-operatively" to solve the global economic problems.
A day after seven central banks around the world cut interest rates in an effort to calm financial markets, the IMF chief said further co-ordinated action was necessary.A day after seven central banks around the world cut interest rates in an effort to calm financial markets, the IMF chief said further co-ordinated action was necessary.
"All kinds of policy co-operation are to be commended," he said."All kinds of policy co-operation are to be commended," he said.
But he issued a stark warning against countries acting unilaterally to fight the crisis, referring to recent isolated moves by certain European Union member countries.But he issued a stark warning against countries acting unilaterally to fight the crisis, referring to recent isolated moves by certain European Union member countries.
"There is no domestic solution to a crisis like this one.""There is no domestic solution to a crisis like this one."
Finance ministers from the G7 group of wealthy nations are to meet in Washington this weekend.Finance ministers from the G7 group of wealthy nations are to meet in Washington this weekend.