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Asian equities get bludgeoned on US Fed’s distressing rescue plan

22 Sep 2011 Evaluate

The discouraging outcome of US Federal Reserve’s two-day policy meeting spooked sentiments across the Asian region as it prompted panic selling across all counters in the region. Apart from Fed’s dramatic $2.65 trillion securities portfolio recast plan, its warning that more downside risks are possible to the world’s largest economy that hurt sentiments globally. Shares of banking and financial firms took the maximum beating in the region amid speculations that Fed's plan to buy $400 billion of bonds with maturities of six to 30 years through June, replacing shorter dated debt, is likely to curb profit margins for global banks.

The benchmarks in Hong Kong and Indonesia were the laggards in the space as they traded with colossal losses of around four and half a percent. Seoul shares nosedived by around three and half a percent in Thursday's morning trades amid increasing pessimism toward the global economy after the US Federal Reserve warned of downside risks to the US economic fundamentals.

Shanghai Composite plunged 45.60 points or 1.81% to 2,467.36, Hang Seng got butchered 799.77 points or 4.25% to 18,024.40, Jakarta Composite got annihilated 178.09 points or 4.82% to 3,519.40, KLSE Composite sank 18.58 points or 1.31% to 1,400.46, Nikkei 225 shaved off 142.84 points or 1.63% to 8,598.32, Straits Times got pounded 50.52 points or 1.81% to 2,741.27, Seoul Composite got bludgeoned 64.44 points or 3.48% to 1,789.84 and Taiwan Weighted plummeted 223.78 points or 2.97% to 7,312.10.

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