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Volatile Asian indices plunge after a flat opening

11 Aug 2011 Evaluate

The optimism of initial trades seem to have fizzled out in the Asian markets as barring the Chinese benchmark all other indices in the region are extending losses. Fresh worries over the lingering euro-zone sovereign debt troubles coupled with gloomy US growth prospects deterred marketmen from indulging in value picking. The temporary boost from Fed’s pledge to keep interest rates at ultra low levels for two years faded after reports that France could soon lose its top-notch credit rating if it is forced to bail out its banks.

Shares in Tokyo resumed the declining trend after US stocks plummeted more than four percent overnight and also because the yen continued to appreciate against the US dollar despite government attempts to lower its value. South Korean stocks recuperated most of the losses by mid-session after plunging 4 percent earlier because of speculations of a sovereign debt downgrade of France and the health of French banks. On the other hand, only Chinese benchmark traded in the green with around half a percent gains on speculation the government may delay interest-rate increases after Premier Wen Jiabao urged global cooperation to stabilize financial markets.

Hang Seng plunged 271.19 points or 1.37% to 19,512.48, Jakarta Composite sank 40.02 points or 1.04% to 3,823.56, KLSE Composite declined 6.37 points or 0.43% to 1,474.15, Nikkei 225 shaved off 85.21 points or 0.94% to 8,953.53, Straits Times plummeted 46.69 points or 1.66% to 2,774.40, Seoul Composite eased 1.84 points or 0.10% to 1,804.40, Taiwan Weighted shed 35.37 points or 0.46% to 7,700.95.

On the other hand, Shanghai Composite climbed 10.94 points or 0.43% to 2,560.12.

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