Asian markets are keying off the ugly day in the US, with deflation fears at the fore and equity markets having broken through the lows of last month, which had been widely touted as support levels. The Nikkei is down 570 points, or nearly 7%.. The Hang Seng is down 5.5%. Mainland Chinese indexes are not faring badly, trading slightly positive or negative. The yen is at 95 to the dollar. Gold is up slightly at $738 an ounce, while Brent crude has fallen to $50.80 a barrel. Dow futures are down 123 and S&P down 16.50.
There is no way to put lipstick on this pig. From Bloomberg:
Asian stocks fell, extending a global rout, as Japan’s exports declined the most in almost seven years and U.S. consumer prices sank by a record…
“It’s the end of the world as we know it,” said Raymond Tang, who oversees $5.8 billion as chief investment officer at CIMB-Principal Asset Management Bhd., a unit of Malaysia’s second-biggest bank. The economic slump is “the worst I’ve seen on a global scale, with no region to help each other,” he said.
The MSCI Asia Pacific Index slumped 4.9 percent to 75.35 at 2:58 p.m. in Tokyo, extending this week’s decline to 9.3 percent. Thirteen stocks fell for each that rose on the measure….
MSCI’s Asian index is less than a point away from its five- year low of 75.19, last reached on Oct. 27, as recessions in Japan and Hong Kong and lower profit forecasts wiped out a 25 percent rally sparked by global interest rate cuts and Barack Obama’s presidential victory in the U.S….
“U.S. consumers have overextended themselves and the consequence of their retrenching is that there’s not going to be any growth for the next five years,” said Takashi Kamiya, who helps oversee some $16 billion as chief economist at T&D Asset Management Co. in Tokyo. “There’s nothing to be positive about.”…
Exports, the main engine of Japan’s economic growth in the past six years, fell 7.7 percent from a year earlier, the Finance Ministry said. The nation’s corporate-bond risk rose to a record after the report, according to the Markit iTraxx Japan index.
MSCI’s Asian index has plunged 52 percent in 2008 as global financial companies’ losses and writedowns from the collapse of the U.S. subprime-mortgage market mounted, eventually toppling Lehman Brothers Holdings Inc. and arresting global expansion. The Asia-Pacific region may grow in 2009 at less than half the pace of the previous two years, the Pacific Economic Cooperation Council said today…..
“Fear has well and truly taken over from greed,” said Rob Patterson, who manages about $2 billion at Argo Investments Ltd. in Adelaide. “We’re seeing undisciplined selling. There’s definitely an element of irrationality to all this.”
The decline in stocks forced Japanese insurers to reduce their full-year earnings forecasts, sending the nine-member Topix Insurance Index down 15 percent, the worst performance among 33 industry groups….
Analysts have cut profit estimates for 48 percent of stocks they cover worldwide, the most in at least 15 years, and more downgrades are likely as the economy slows, JPMorgan Chase & Co. said yesterday.