Nikkei leads Asia in markets fall

source :

(CNN) — Japan’s Nikkei Exchange closed down 9.6 percent on Friday, as Asian and Pacific markets saw stocks sink in response to the U.S. stock market’s new five year low.

Dealers at the Tokyo Stock Exchange on Friday.

Dealers at the Tokyo Stock Exchange on Friday.

Trying to stem the tide, the Bank of Japan injected 4.5 trillion yen ($45 billion) into financial markets — the largest single-day amount in history.

Meanwhile, the Australian All Ordinaries index closed more than 8 percent lower, and South Korea’s KOSPI index finished the day off 4.3 percent.

Hong Kong’s Hang Seng index was down 7 percent, and Mumbai’s BSE SENSEX was down more than 6 percent.

India’s central bank also tried to boost markets, making 400 billion rupees ($8.2 billion) available for the financial system. 

The Dow Jones industrial average lost 679 points, or 7.3 percent, on Thursday, closing at its lowest point since May 21, 2003. It was the Dow’s third biggest one-day point-loss ever.

The Standard & Poor’s 500 index lost 7.6 percent and closed at its lowest point since April 28, 2003. The Nasdaq composite lost 5.5 percent and closed at its lowest point since June 30, 2003.

During the past seven sessions, the Dow has lost 2,271 points, or 20.1 percent. Since hitting an all-time high of 14,164.53 one year ago Thursday, the Dow has lost 39.4 percent.

The White House confirmed earlier Thursday that the U.S. Treasury Department is looking at buying equity stakes in some U.S. banks.

Spokesperson Dana Perino confirmed reports that the U.S. could soon join the United Kingdom, Iceland and Italy in announcing a plan to inject capital directly into their troubled banking systems.

“These capital injections are something that Secretary (Henry) Paulson is actively considering,” said Perino. She said she could not comment on the timing or extent of such investments.

The move would be made under the $700 billion Wall Street bailout passed by Congress on Friday.

But the possibility of Treasury intervention failed to reassure investors amid the ongoing credit crisis.

Asian central banks also did their part to give markets a potential boost. South Korea’s central bank — the Bank of Korea — slashed its key interest rate by a quarter percent, the Yonhap news agency reported. The Bank of Japan injected 2 trillion yen ($20 billion) into money markets. And the Hong Kong Monetary Authority cut its key interest rate again — 1.5 percent during two days.

European markets posted mixed results Thursday, but the continent’s most influential — London, Paris and Frankfurt — all closed 1 percent to 2 percent lower.

Russia’s battered stock markets rebounded Thursday after financial regulators reversed a decision to close them, so vigorously that one exchange had to be temporarily closed.

The index of leading stocks on the MICEX exchange, where most of Russia’s trading takes place, gained nearly 16 percent before halting trading around midday, the second time in less than three hours of action that it suspended activity.

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