- SINGAPORE (Reuters) - Asian
stocks tumbled on Wednesday as investors reeled from another ugly day on
Wall Street, where the broad equity market dived to fresh five-year lows
on worries about corporate profits and accounting scandals.
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- Shares sank almost three percent in Japan and nearly
four percent in Hong Kong, sending benchmark gauges in both countries crashing
through the 10,000 level after U.S. shares slumped for a fourth session
running.
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- Australia, Singapore and Taiwan lost two percent or more,
while the South Korean market dived almost four percent.
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- The dollar retreated, while U.S. Treasuries jumped.
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- Dashing hopes that U.S. shares were nearing a floor,
the Nasdaq Composite Index dived 4.2 percent and the Standard & Poor's
500 tumbled 2.7 percent to lows unseen since April 1997. The Dow Jones
Industrial Average lost 1.1 percent.
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- Citigroup Inc. and J.P. Morgan Chase & Co. Inc. tumbled
as concerns grew that the two largest U.S. banking companies may have offered
to other firms the type of disguised loans used by bankrupt energy trader
Enron Corp.
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- The immediate outlook for U.S. stocks remained uncertain.
Dow and S&P futures were down about 0.6 percent, with those for the
Nasdaq 100 off 0.2 percent.
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- "A further, bottomless fall on Wall Street would
remind investors of the risk of holding any equity assets, including Japanese
stocks," said Hiroshi Ariga, deputy general manager at Norinchukin
Zenkyoren Asset Management.
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- Tokyo stocks, which had rallied on Tuesday along with
the rest of Asia, took another thumping from the losses on Wall Street.
The benchmark Nikkei average was down more than 270 points, or 2.7 percent,
at 9,943.39, with losses accelerating as it broke below 10,000 in the afternoon.
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- "DUMBFOUNDED" MARKETS SLIDE
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- Hong Kong's benchmark Hang Seng Index was down almost
four percent at a year low of 9,912.96.
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- In Sydney, the benchmark S&P/ASX 200 index shed two
percent to 2,971.3. Singapore's Straits Times Index was down 2.2 percent
at 1,531.16.
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- The Korea Composite Stock Price Index dived 3.7 percent
to as low as 715.10, while Taiwan slid 2.5 percent to 5,028.06.
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- "The market is just dumbfounded by these falls overseas,
I think, so what it's doing is just frightening off any sort of activity
in our market," Forsyth Barr Frater Williams broker Alan Wills said
in New Zealand, where the NZSE-40 Capital Index was down a relatively modest
1.6 percent.
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- The dollar retreated against the yen and euro on light
selling by Japanese exporters, but few expected a significant drop given
budding support for the U.S. currency after weeks of losses. Traders expect
the dollar to find support as U.S. banks shift funds into dollars to cover
for heavy losses on Wall Street.
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- The dollar was trading around 117.14 yen against 117.53
yen in late New York on Tuesday. The euro inched up to 99.15 cents from
Tuesday's 98.75.
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- Despite the falls in U.S. stocks, most analysts were
expecting the dollar to rise further, possibly to 120 yen.
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- "There is a deeper thought going on as to the implications
of a weak U.S. economy," said Marshall Gittler, senior currency strategist
at Bank of America in Tokyo.
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- "Meaning in Japan, for example, if the U.S. economy
is in bad shape, than the Japanese economy is in terrible shape."
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- TREASURIES FIRM
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- U.S. Treasuries were buoyant as the exodus from stocks
continued, with short-term yields hitting record lows. Benchmark 10-year
Treasury notes were at 103-28/32 and 4.37 percent in Asian trade, compared
to 103-19/32 and 4.41 percent at the U.S. close.
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- The falls in stocks also supported Japanese government
bonds (JGBs), sending the yield on the benchmark 240th cash 10-year JGB
down a half basis point to 1.3 percent.
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- Gold was a touch firmer at $313.75 from New York's last
price of $313.50
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- Oil futures rose after a closely watched industry report
showed U.S. crude oil stocks plummeted to a nine-month low last week. Front-month
September crude traded at $26.63 per barrel, up 32 cents from Tuesday's
close of $26.31 in New York.
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- Overnight, the tech-laced Nasdaq lost 53.60 points to
1,229.05. The S&P 500 slid 22.14 points to 797.70. The Dow fell 82.24
points to 7,702.34, after closing under the 8,000 level on Monday for the
first time since mid-October 1998.
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- J.P. Morgan slumped 18 percent and Citigroup fell nearly
16 percent. The two banks entered into Enron-style "prepay" financings
with at least 10 unidentified companies, congressional investigators said
on Tuesday.
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- European shares also tumbled to five-year lows, with
London's FTSE 100 plumbing depths unseen in six years.
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