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Asian markets witness brutal carnage on rating agencies’ warnings

19 Dec 2011 Evaluate

A dramatic wave of selling hit Asian shores on Monday, dragging all the equity indices in the region substantially lower. Most indices in the region traded with massive losses in the range of 2-5% as discouraging developments from Europe continued to dissuade investors in Asia. Stocks in the region fell amid heightened worries that potential credit ratings downgrades of several Euro-zone nations may derail progress towards resolving the region's onerous debt problem. Credit rating agency Fitch cited concerns whether the budget discipline pact that European nations intend to adopt will be able to avert the debt debacle. Meanwhile, another rating agency Moody's downgraded Belgium's credit rating to Aa3 with a negative outlook, from Aa1, raising investors’ concerns.

The benchmark in South Korea traded with colossal losses of close to five percent amid reports that the mercurial leader Kim Jong Il of nuclear-armed North Korea has died, raising fears of increased political instability in the region. The equity index in Japan drifted to around the lowest levels in three-weeks amid lingering worries over the European debt trouble.

Shanghai Composite got pummeled by 57.16 points or 2.57% to 2,167.68, Hang Seng got pounded by 444.97 points or 2.43% to 17,840.42, Jakarta Composite declined 13.47 points or 0.36% to 3,754.88, Nikkei 225 plunged 123.66 points or 1.47% to 8,278.06, Straits Times plummeted 47.13 points or 1.77% to 2,612.09, Seoul Composite got butchered 86.79 points or 4.72% to 1,753.17 and Taiwan Weighted nosedived 153.98 points or 2.27% to 6,631.11.

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