World markets hit again

HONG KONG, Jan 12: Asian markets were stuck in crisis on Monday despite soothing words from US officials visiting Jakarta for high-level mee...

HONG KONG, Jan 12: Asian markets were stuck in crisis on Monday despite soothing words from US officials visiting Jakarta for high-level meetings that spurred hopes of a solution to economic chaos in Indonesia.

Major stock markets in Hong Kong, Tokyo, Singapore, Thailand, and Sydney were all weaker, while the yen fell against the US dollar and the Thai baht resumed its slide, hitting fresh record lows. quot;Obviously, with this sort of movement, the rest of the world cannot ignore what is happening in Asia,quot; said Miles Remington at Crosby.

Rapid falls and persistent weakness were expected to drag London shares lower, with dual-listed shares in Hong Kong banks spreading the gloom that has settled over Asia. The outlook for Wall Street was more uncertain, with some traders debating whether Friday8217;s 2.8-per cent move in the Dow Industrials had already factored in much of Monday8217;s Asian chaos.

European bourses were sharply lower. The FTSE 100 index of London was off 2.61 per cent, or 133.9 points, at 5004.4. Germany8217;s DAX was off 3.53 per cent, and France8217;s CAC index was down 3.15 per cent. Wall Street stocks in the US is also poised for a fall. In Hong Kong, the blue chip Hang Seng index crashed through the key 8,000 barrier soon after the opening. The index shed 11 before recovering to close 773 points or 8.70 weaker at 8,121 162.

Tokyo sank 2.21 to 14,664 sparking renewed jitters about the health of its banking sector, while Australian shares were down 2.33 at 2,542. But Jakarta bucked the regional trend on market hopes that renewed talks between senior officials from the US and IMF could find a resolution.

The outcome of talks between the IMF and President Suharto would not be made public until Thursday. But IMF first Deputy Managing Director Stanley Fischer said the talks went well. Jakarta stocks were up 1.16 to 346.96 while the rupiah was slightly weaker at 8,600/9,000.

Weaker markets in Hong Kong, Tokyo and Sydney prompted renewed fears of a spread of the Asian contagion to the region8217;s healthiest economies.

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The Hong Kong dollar peg to the US dollar remained firm, but currency forwards widened and interest rates soared in another sign of the spread of the US dollar hedging that has crushed currencies throughout the region.

Taipei fell victim to the trouble in Hong Kong, with the main stock index closing 4.68 weaker at 7,375.14, while the weaker yen helped to pummel the Taiwan dollar below a 10-year low at T 34.40 to the U.S. Dollar. Singapore stocks were also off by more than 10 at 1,050.88 at 0755GMT while the Singapore dollar continued to fall, reaching 1.7940/90 against 1.7690/7740 on Friday. The Thai baht hit fresh record lows of 56.50 to the US dollar.