Asian Stock Markets in a Down Vortex (AP) (16-01-2008)

HONG KONG (AP) -- Stock markets Asian stock markets plunged Wednesday as speculation slowly gives way to certainty that the area’s major export customer the U.S. is sliding into a recession that could lead to a global slowdown.

Investors couldn’t get rid of stocks fast enough, taking a leaf out of the U.S. stock markets’ book after the announcement that Citigroup Inc. had lost nearly $10 billion in the fourth quarter as it wrote down bad mortgage assets. As well, the weak U.S. retail sales figures added insult to injury and sent the Dow Jones industrial average down 277 points, or 2.2 percent.

In Hong Kong, the benchmark Hang Seng index closed down 1,386.93 points or 5.37% at 24,450.85, while Tokyo's Nikkei 225 index fell 3.35 percent to close at 13,504.51 points.

Markets in Australia, China, South Korea and New Zealand also fell sharply on worries about slower growth in the U.S. and around the world.

Now many investors and analysts believe the Fed will cut rates by a half-point at its Jan. 29-30 meeting.

Japanese semiconductor stocks also fell after Intel Corp. shares plunged on concerns that the world's largest semiconductor maker is feeling the pinch of an ailing U.S. economy.

A surge in the yen, which hurts Japan's vital exporters, also depressed Tokyo stocks. The U.S. dollar fell to 106.02 yen, the lowest level in 2 1/2 years.

In China, the benchmark Shanghai Composite Index fell 2.6 percent to 5,302.64 by midday. China shares, which are mostly isolated from world trends due to regulatory controls, have gained about 1 percent since the beginning of the year, compared with losses in several other Asian markets.

But worries over the U.S. economic outlook and possible lending curbs by the central bank have hurt bank shares.

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