It’s a nervous day for European and US traders: Asian markets tumbled on Monday, with significant declines across the board.
The Nikkei fell 2 per cent to close at its lowest level in 15 months. The yen surged to an 18-month high against the dollar and triggered a rout from investors in export-led businesses.
The Shanghai composite dropped 2.9 per cent after China’s central bank cut interest rates.
Hong Kong’s Hang Seng Index led the losers, however, falling 4.5 per cent.
Nor were Asia’s declines confined to the bigger markets. The South Korean KOSPI ended 3.4 per cent lower, Taiwan fell 4.3 per cent and Singapore’s Straights Times Index was off 2.8 per cent.
In Australia, stocks were helped by a surge in miner Rio Tinto to an all time high on the back of the approach from rival BHP Billiton. The S&P/ASX 200 was nonetheless closed down 1.4 per cent.
Financial institutions around Asia are nervous, say traders, with subprime fears finally beginning to hit home. Investors are beginning to realise that some of the biggest Asian names might be just as mired in the mess as their European or US counterparts.