Asian Markets Consolidate Losses As Financial Worries Spread Europe

Nikkei Touch Nearly 5 year low while Australian Indices Plunge to 3 Year Low

The stock markets across the Asian region tumbled on fears that the bailout plan approved by the House of Representatives might not avert a recession in the U.S. and after the U.S. Labor Department reported weaker-than-expected jobs data for September.

Oil prices fell by around $4 today on concerns that a global recession would reduce demand for oil. At 5:08 a.m. ET, oil was quoted at $89.90 a barrel, down $3.98, after the contract dropped 9 cents to close at $93.88 a barrel in New York trading on Friday.

In currency market, the yen strengthened against the dollar, as investors unwound risky assets. The U.S. dollar fell to the upper 103-yen levels in late Tokyo deals from the mid 104-yen levels in early trade and Friday's close in the lower 105-yen range in Tokyo.

The Australian dollar closed at a two-year low following one of its biggest one-day falls since floating almost 25 years ago. The Australian dollar fell 3.05 U.S. cents to finish the local session at US$0.7495-0.7498, down from Friday's close of US$0.7799-0.7805.

The New Zealand dollar finished lower against the U.S. dollar on the back of worse-than-expected forecasts reported by New Zealand's Treasury. The kiwi closed the session at US$0.6515, down from US$6595 in early trade and US$0.6622 late Friday.

The South Korean won fell to a six-year low against the greenback. The local unit closed at 1,269.0 a dollar, down from Thursday's close of 1,223.5 a dollar.

Philippine peso fell, trading near a 17-month low, after Asian stocks declined on speculation investors will avoid emerging-market assets as the credit crisis spreads to Europe and economic growth slows. The currency fell 0.60% to 47.44 per dollar. The peso dropped by the most in five weeks.

Coming back in equities, the Japanese stock market closed sharply lower, with the Nikkei and Topix indexes plunging to their lowest levels in nearly five years. The benchmark Nikkei 225 index closed down 465.05 points or 4.25% at 10,473.09, extending its losses for the third consecutive trading session. The broader Topix index of all First Section issues on Tokyo Stock Exchange lost 48.92 points or 4.67% to finish at 999.05, falling below the 1,000 mark for the first time since December 2003.

On the economic front, the Bank of Japan kicked off its two-day monetary policy meeting on Monday in Tokyo. The central bank will announce its interest rate decision tomorrow.

The BOJ Policy Board is expected to discuss the Japanese economy slowing on weaker exports while studying rising prices with the key consumer inflation rate at its highest in more than 16 years. Widening upheavals involving U.S. and European financial institutions due to the credit crisis are also expected to be high on the agenda.

For the latest policy-setting panel meeting, market participants generally forecast the central bank will keep its key short-term interest rate on hold at 0.5% for the 20th month running, given that the BOJ has said Japanese credit conditions are already "accommodative enough."

The stock market in the Mainland China closed sharply lower as investor resumed the trading after a weeklong national holiday, tried to catch up with global market losses last week as the credit crisis continued to unfold. The benchmark Shanghai Composite Index, which covers both A- and B-shares listed on the Shanghai Stock Exchange, closed down 120.05 points or 5.23% at 2,173.74 points The Shanghai B-share Index fell 7.03 points or 5.29% to 125.73, while the Shenzhen B-share Index was down 14.01 points or 4.50 pct at 297.29.

In market news, the China Securities Regulatory Commission said it has received approval from the State Council or cabinet to launch margin trading of securities on a trial basis. With the agreement of the cabinet, the CSRC will in the near future launch margin trading and short selling on a trial basis," the commission said in a statement on its website, without giving an exact start date. The move, which comes at a time of renewed jitters in the financial sector thanks to the banking crisis in the United States, seemed designed to boost confidence in China's stock markets.

On the economic front, the People's Bank of China views governor Zhou Xiaochuan published a comment saying a stable currency and job creation as priorities in its economic stewardship.

In a statement on the People's Bank of China website, Zhou outlined what the central bank would do to uphold the scientific development approach -- Chinese President Hu Jintao's political doctrine that highlights sustainable development. The priority is to address questions such as how to keep a stable currency value, how to effectively promote employment and support growth of consumption, Zhou said.

The benchmark Hang Seng Index closed down 878.64 points or 4.97% at 16,803.76 while the Hang Seng China Enterprise index plunged by 6.62% to 8,416.90.

The Australian stock market closed at its lowest level in almost three years, extending losses for a third straight trading session. The benchmark S&P/ASX 200 index closed down 155 points or 3.3% at 4,540.4 and the broader All Ordinaries index shed 158.1 points or 3.4% to finish at 4,544.7.

The New Zealand stock market closed sharply lower, extending Friday's steep losses. The benchmark NZX 50 index finished the day down 103.16 points or 3.38% at 3,048.38 and the broader NZX All Capital index fell 92.09 points or 2.97% to finish at 3,098.08.

The New Zealand Treasury's report on the state of the economy, ahead of the election, also added to the gloom. Treasury said that the economic outlook had deteriorated badly since the May budget and this meant reducing its revenue forecasts and increasing its predictions of costs. Speaking at the release of the Treasury update, Finance Minister Michael Cullen said that the scale of international turmoil was unprecedented.

The South Korean market plunged, extending its losses for the sixth consecutive trading session. Stocks lost ground as a U.S. rescue plan failed to restore investor confidence in markets around the globe. The benchmark Korea Composite Stock Price Index or KOSPI tumbled 60.9 points, or 4.29%, to finish the session at 1,358.75, its lowest level since January 2007.

The Philippines stock exchange bunged 2.6% lower on 6 October 2008 as investors took a wait-and-see attitude on the bailout package approved by the US Congress over the weekend after opening 1.6% lower tracking regional bourses across Asia on worries about the state of the global economy.

The benchmark index PSEi lost 66.68 points or 2.6% to close at 2,499.53. All six-sub indices tracked the composite index with holding firms shedding the most at 53.50 points or 4% to 1,281.64.

On the economic front, the Bangko Sentral ng Pilipinas (BSP), the country's central bank held its interest rates on hold at after a string of rises since June, signaling a shift of priorities towards protecting growth in the face of the global credit crisis. The BSP raised rates 1% point since June to combat inflation.

In Thailand, the benchmark SET index plunged by 38.25 points or 6.48% to close at 551.80. The decline was higher than the fall previous fall of 1.28%. The SET 100 recorded a decline of 7.28% or 64.66 points to close at 823.02. Likewise, the Set 50 fell by 7.28% or 30.07 points ending the session at 382.91.

In India, a sell-off in index pivotals pulled down Sensex close to 800 points at provisionally lost 679.26 points. As per the provisional figures, BSE 30-share Sensex lost 679.26 points or 5.42% to 11,847.06. The index shed 793.75 points at the day's low of 11,732.97, hit in late trade, its lowest level since 13 September 2006. The Sensex fell 241.83 points at day’s high of 12,284.49, in early trade. The S&P CNX Nifty was down 195.05 points or 5.11% to 3,623.25 as per the provisional figures. Nifty hit a low of 3,581.60, its lowest level since 16 March 2007.

Elsewhere, the Singapore's Straits Times index was down 5.6% at 2,168.32; Taiwan's weighted index is down 4.12% at 5,505.70 Indonesia's Jakarta Composite index slumped by 10.03% at 1,648.74; and Malaysia's KLCI is down 1.95% to close at 996.84.

In the other part of the world, the European shares staggered with banks slumping as governments in Europe didn't match a $700 billion bailout package from the U.S. and instead continued to shore up institutions on a piecemeal basis. In the opening trade the German DAX 30 index fell 5.1% to 5,502.63, and the French CAC-40 index dropped 5.5% to 3,856.44. The U.K. FTSE 100 index slumped 5.2% to 4,723.59. At 11.53 GMT, the German DAX 30 index fell further to 5.4% to 5,482.26, the French CAC-40 index slipped 5.9% to 3,841.57 and the U.K. FTSE 100 index slumped further 5.3% to 4,716.06.

Among the economic news, the new car registrations in Britain fell by an annual 21.2 percent in September, providing further evidence that the credit crunch is keeping buyers out of showrooms.

The Society of Motor Manufacturers and Traders said September's drop was the worst for that month since registration plate changes became twice yearly in 1999.

Car registrations numbered 330,295 last month, down from 419,290 in September 2007. New registrations fell an annual 18.6 percent in August to record their weakest showing since 1966.