HONG KONG // Asian stock markets slipped today after a two-day rally, tracking Wall Street lower amid concerns that worldwide efforts to boost the financial system will not be enough to stave off a global recession. Japan's Nikkei 225 index shed 89.98 points, or 0.95 per cent to 9,357.59 after surging 14 per cent in the previous session - its biggest single-day gain ever. Hong Kong's Hang Seng Index lost 381.10, or 2.26 per cent, to 16,451.78 after rising more than 13 per cent the previous two days.
Markets in Australia, South Korea, China and Taiwan were also lower. The drop followed US markets, where major benchmarks pulled back after President George W Bush announced the government would use part of the US$700 billion (Dh2.57 trillion) financial bailout to pump capital into major banks and help get lending flowing again. European governments are investing about $2 trillion in their own ailing banks.
Despite the measures, concerns about the global economy and company profits were still weighing heavily on markets, analysts said. "We had a huge rally on Monday and Tuesday, so there has to be some profit-taking," said Dariusz Kowalczyk, chief investment strategist for CFC Seymour in Hong Kong. "There's also more clarity about damage to the economy, and investors are likely to conclude that the rally at the beginning of the week overstates the potential for earnings."
Since Sept 12, the last session before the US investment bank Lehman Brothers collapsed, the Nikkei has lost 23 per cent and the Hang Seng has shed 13 per cent. Australia's benchmark is down 12 per cent and Taiwan's key index off 17 per cent. On Tuesday, a drop in a key bank-to-bank lending rate indicated banks might be growing more willing to lend to one another. The London interbank offered rate, or Libor, for three-month dollar loans fell to 4.64 per cent from 4.75 per cent.
*AP
