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Asia markets follow US share drop Asia markets follow US share drop
(10 minutes later)
Asian markets have plummeted after the Dow Jones share index in New York fell to its lowest level in five years, amid fears of a protracted global recession.Asian markets have plummeted after the Dow Jones share index in New York fell to its lowest level in five years, amid fears of a protracted global recession.
Benchmark indexes in Japan, Hong Kong and South Korea all dropped by about 5% in early trading.Benchmark indexes in Japan, Hong Kong and South Korea all dropped by about 5% in early trading.
On Wednesday, Wall Street shares fell 5% after the US central bank slashed its economic growth forecasts for 2009.On Wednesday, Wall Street shares fell 5% after the US central bank slashed its economic growth forecasts for 2009.
Concern also grew for the future of the three biggest US carmakers as lawmakers argued about a mooted rescue package.Concern also grew for the future of the three biggest US carmakers as lawmakers argued about a mooted rescue package.
Chief executives from General Motors, Ford and Chrysler say the firms could collapse unless they receive aid fast - which could lead to millions of job losses across the US.Chief executives from General Motors, Ford and Chrysler say the firms could collapse unless they receive aid fast - which could lead to millions of job losses across the US.
But the automakers have faced fierce questions on Capitol Hill about their request for a $25bn (£16.6bn) bail-out deal.But the automakers have faced fierce questions on Capitol Hill about their request for a $25bn (£16.6bn) bail-out deal.
'No positives''No positives'
In Thursday trading, Tokyo's benchmark Nikkei 225 average sank by 4.7% as Japan revealed demand for its exports had declined, with the posting of its second trade deficit in three months.In Thursday trading, Tokyo's benchmark Nikkei 225 average sank by 4.7% as Japan revealed demand for its exports had declined, with the posting of its second trade deficit in three months.
In Hong Kong, meanwhile, the benchmark Hang Seng Index dropped by 4.5% in morning trading.In Hong Kong, meanwhile, the benchmark Hang Seng Index dropped by 4.5% in morning trading.
The BBC's Duncan Bartlett in Tokyo says several East Asian countries - including Japan, Singapore and Hong Kong - are already in recession and the thought that the US may be about to join them has been enough to send shares tumbling across the region.Investors are worried about the extent of the slowdownThe BBC's Duncan Bartlett in Tokyo says several East Asian countries - including Japan, Singapore and Hong Kong - are already in recession and the thought that the US may be about to join them has been enough to send shares tumbling across the region.Investors are worried about the extent of the slowdown
Bad news from the US worries Japanese firms like Toyota and Nintendo which usually depend on American consumers to make a lot of their profit, our correspondent adds.Bad news from the US worries Japanese firms like Toyota and Nintendo which usually depend on American consumers to make a lot of their profit, our correspondent adds.
"We've gone past the poor sentiment stage," Miles Remington, head of Asian sales trading at BNP Paribas Securities in Hong Kong, told the Associated Press news agency."We've gone past the poor sentiment stage," Miles Remington, head of Asian sales trading at BNP Paribas Securities in Hong Kong, told the Associated Press news agency.
"People are looking for any kind of positive and there are just no positives out there. Everyone seems to be united in the depressed global outlook. Whether it's commodities or equities, everything seems to be on a downturn.""People are looking for any kind of positive and there are just no positives out there. Everyone seems to be united in the depressed global outlook. Whether it's commodities or equities, everything seems to be on a downturn."
The latest falls come days after figures showed Japan had joined Hong Kong and the euro-zone by sliding into a recession, having posted two consecutive quarters of economic contraction.
Meanwhile, the US Federal Reserve said the country's gross domestic product - the value of all goods and services - could be flat or grow only marginally this year, and might shrink in 2009.Meanwhile, the US Federal Reserve said the country's gross domestic product - the value of all goods and services - could be flat or grow only marginally this year, and might shrink in 2009.
It said positive economic growth was only likely to return in 2010 and predicted further interest rate cuts might be necessary.It said positive economic growth was only likely to return in 2010 and predicted further interest rate cuts might be necessary.
Month-on-month US consumer prices fell by 1% in October - the biggest drop in 60 years - which has reinforced fears of rapid slowdown.Month-on-month US consumer prices fell by 1% in October - the biggest drop in 60 years - which has reinforced fears of rapid slowdown.
Carmakers were among the biggest fallers as the Dow Jones average closed down 427 points at 7,997 on Wednesday - dropping below the 8,000-level for the first time since 2003.Carmakers were among the biggest fallers as the Dow Jones average closed down 427 points at 7,997 on Wednesday - dropping below the 8,000-level for the first time since 2003.
GM shares were down 15% at a 66-year low, while rival Ford slumped to a 26-year low.GM shares were down 15% at a 66-year low, while rival Ford slumped to a 26-year low.
Prospects for an industry bail-out remain uncertain and politicians have been arguing over a compromise deal.Prospects for an industry bail-out remain uncertain and politicians have been arguing over a compromise deal.
Investors are concerned about how a possible bankruptcy among US carmakers could further hurt an already fragile economy.Investors are concerned about how a possible bankruptcy among US carmakers could further hurt an already fragile economy.