Stock markets fell sharply across most of Asia today and continued to decline in Europe as investors worried about weakness in the American economy. But share prices rebounded in Shanghai and Shenzhen, the mainland Chinese stock markets that had been the first to tumble in Tuesday’s global sell-off. Stock markets elsewhere fared much worse. In Tokyo, the Nikkei 225 fell 4.1 per cent in early trading, before recovering a bit to end the day down 2.9 per cent. Hong Kong’s Hang Seng fell 2.5 per cent. It, too, showed a slight recovery from heavier losses in morning trading. Practically every other stock index in Asia outside of mainland China also fell. Managing director general of Asian Development Bank, Rajat Nag, said the economic fundamentals of most Asian economies are strong, but the region remains dependent on exports, especially to the US. Analysts said the biggest factors were concerns about a possible downturn by the American economy and whether that would lead to cuts in interest rates by the Federal Reserve. That could in turn undermine the value of Japan’s currency, the yen. They said the effect of the Shanghai drop was felt indirectly via its impact on New York. The sharp drop in durable goods orders in the US prompted concerns that Ben Bernanke, the chairman of the Federal Reserve, may be forced to cut interest rates to reinvigorate economic growth.
