Asian Stock Markets crashed today as, fears of the U.S.economy plunging into a recession in the near, future gained further grounds from the bad economic news that is following one after another.
First, there was the news that the Citigroup Inc had lost more than U.S.$10 billion in mortgage assets which was written off. This was followed by reports of weak U.S. retail sales. The economy is battered not only from the economic front. Till date, there has been no accepted way-out from the consequences and crippling effect of the war in Iraq. The Presidential Contestants have not spelled out any clear-cut solution to this vexing problem. A section of economists also believe that the Federal Reserve has not done enough to keep the U.S.economy going or its reengineering of the interest rates did not produce the desired results. Under the circumstances, it is but inevitable for the global economies especially the ones which are heavily dependant on U.S. for their trade to react in a negative manner. This was only a reflection seen in the Asian Stock Market on the Wednesday.(i.e. today)
The fall in the markets was across the board and wide-spread. In Hong Kong, the Bench Mark Index, Hangseng Index fell 4% while the Shanghai composite Index in China fell by 2.6%. The Nikki Index in Japan lost 3.35%. The Sensex of the Mumbai Stock Exchange lost over 600 points wherein trading is yet to close for the day.
Markets in Australia, South Korea and Newzeland also fell in line.
The U.S. Fed is expected to cut the interest rates by another half-a-percentile, but, whether this alone would contribute in reviving a sagging economy, if one goes by past scenario, is very much doubtful and at best this may be considered better than doing nothing.