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| Asian stocks fall on emerging market growth fears | Asian stocks fall on emerging market growth fears |
| (35 minutes later) | |
| Asian stocks have fallen as investors worried that a pull back in easy money policies in the US will hurt growth in emerging markets. | Asian stocks have fallen as investors worried that a pull back in easy money policies in the US will hurt growth in emerging markets. |
| There has been speculation that the US may further scale back a key stimulus measure - aimed at boosting liquidity in the market - in coming days. | There has been speculation that the US may further scale back a key stimulus measure - aimed at boosting liquidity in the market - in coming days. |
| Meanwhile, concerns over tighter credit conditions in China hurting its growth also dented investor morale. | Meanwhile, concerns over tighter credit conditions in China hurting its growth also dented investor morale. |
| Stock indexes in Japan, Hong Kong and South Korea all declined. | |
| Japan's Nikkei 225 index tumbled 2.1%, Hong Kong's Hang Seng fell 2% and South Korea's Kospi shed 1.3%. | |
| Investors have also been rattled by the recent fall in currencies of Argentina and Turkey. | |
| Last week, Argentina's currency, the peso, saw its sharpest one-day fall since the country's 2002 financial crisis. The peso plunged 11% against the US dollar on Friday after the central bank unexpectedly abandoned its efforts to support it. | |
| The Turkish lira has also been volatile, falling to an all-time low in recent weeks, on concerns that a corruption scandal may destabilise the government. | |
| Tapering effect? | Tapering effect? |
| The US central bank has been running a stimulus programme, known as quantitative easing, aimed at boosting its economy after the slump caused by the global financial crisis. | The US central bank has been running a stimulus programme, known as quantitative easing, aimed at boosting its economy after the slump caused by the global financial crisis. |
| Under the programme, the US Federal Reserve has been buying bonds worth $85bn (£51.8bn) per month. | Under the programme, the US Federal Reserve has been buying bonds worth $85bn (£51.8bn) per month. |
| The measure is aimed at keeping interest rates low and boosting economic activity in the country. | The measure is aimed at keeping interest rates low and boosting economic activity in the country. |
| However, some of the increased liquidity has flowed into emerging markets - including those in Asia over the years, lifting stock and asset prices in those economies. | However, some of the increased liquidity has flowed into emerging markets - including those in Asia over the years, lifting stock and asset prices in those economies. |
| As the US economy showed signs of recovery, the US central bank announced in December that it planned to scale back the programme by $10bn per month. | As the US economy showed signs of recovery, the US central bank announced in December that it planned to scale back the programme by $10bn per month. |
| There has been growing speculation that the Fed may reduce its bond purchases by another $10bn per month at its meeting this week. | There has been growing speculation that the Fed may reduce its bond purchases by another $10bn per month at its meeting this week. |
| The fear among many is that as US scales back the measure, it may see investors pull out of emerging markets resulting in a decline in stocks and currencies in those economies. | The fear among many is that as US scales back the measure, it may see investors pull out of emerging markets resulting in a decline in stocks and currencies in those economies. |
| Analysts said such concerns were a key reason behind the sell-off in Asian markets on Monday. | Analysts said such concerns were a key reason behind the sell-off in Asian markets on Monday. |
| "Everyone was reminded about last May's turmoil when investors unwound their positions in emerging markets on worries about [the] Fed's tapering," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo. | "Everyone was reminded about last May's turmoil when investors unwound their positions in emerging markets on worries about [the] Fed's tapering," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo. |
| Earlier this month, the World Bank also warned that while the global economy was at a "turning point" growth prospects "remained vulnerable" to the impact of the withdrawal of economic stimulus measures in the US. | Earlier this month, the World Bank also warned that while the global economy was at a "turning point" growth prospects "remained vulnerable" to the impact of the withdrawal of economic stimulus measures in the US. |