Asian stocks plummet in early trade; Nikkei dives 4%

Forexpros – Asian stocks sank in early trade Tueday, pulled down by steep drops on Wall Street and worsening prospects for global economic growth following the U.S. credit rating downgrade.

During early Asian trade, Hong Kong’s Hang Seng Index retreated 2.2% to 20,490.57, Japan’s Nikkei 225 Index tumbled 4% to 8,727.83, Australia’s S&P/ASX 200 declined 4.25% to 3,816.80, and South Korea’s Kospi Index fell 4.75% to 1,780.67.

Along with the Nikkei, the broader-based Topix Index of all issues listed on the first section of the Tokyo Stock Exchange dropped 3.7% to 754.26.

Late Friday, Standard & Poor's  downgraded the United States’ long-term credit rating from AAA to AA-plus, citing debt levels in the world's largest economy.

During the Monday session, U.S.  President Barack Obama attempted to ease fears in the market surrounding the downgrade, blaming current debt woes on political gridlock in Washington.

“No matter what some agency may say, we’ve always been and always will be a triple-A country,” Obama said.

Obama’s pep talk did little to turn the tide on U.S. shares, as the Dow Jones Industrial Average surrendered 5.6% to 10,809.85, the Nasdaq Composite Index dropped 6.9% to 2,357.69, and the S&P 500 plunged 6.7% to 1,119.46. It was the sixth worst drop ever for U.S. stocks.

In Tokyo, financial issues and exporters led declining issues with Sumitomo Mitsui Financial Group Inc. down 4.4% and Mizuho Financial Group Inc. lower by 3.4%.

The world’s leading auto manufacturer Toyota Motor Corporation fell 4.3%, Nissan Motor Corp. Ltd. fell back 4.4% and and Mazda Motor Corp. sank 5.3%.

In Sydney, National Australia Bank Ltd. lost 4.5% and Macquarie Group Ltd. was down by 6.2% in early trade.

Later in the day,China was due to publish data on inflation, industrial production, and retail sales. 

The outlook for European stocks was pessimistic. France’s CAC 40 futures was lower by 1.17% to 2,968.20, Britain’s FTSE 100 futures fell 3.4% to 5,068.95, while Germany’s DAX futures retreated 1.5% to 5,606.90.








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