Asian markets took a pounding yesterday as shaken investors feared scandal-hit Wall Street could deliver further blows to the global financial system.
South Korea's key index plunged 4.46 per cent, Taiwan stocks fell 2.29 per cent and Hong Kong's Hang Seng Index dived 215.21 points, or 2.08 per cent, to 10,110.25 points.
In afternoon trading in New York, the Dow Jones Industrial Average was at 7,956.68, down 62 points, or 0.78 per cent, after dropping more than 200 points at one point.
The latest bout of selling across the region followed news that beleaguered US telecoms giant WorldCom was filing for bankruptcy protection and that even a household name like Johnson & Johnson was caught up in accounting allegations.
'The [Hong Kong] market is into a stage of mass panic. The market simply won't respond to any good news but will over-react to any bad news,' said Phillip Securities research director Louis Wong Wai-kit. 'People are worried about more accounting scandals. They are worried that more blue chips will join the procession of corporate scandals.'
H shares fell 4.43 per cent as investors took their profits in one of the few sectors of the Hong Kong market to record gains this year. The sell-off in Hong Kong took place despite an appeal for calm by Financial Secretary Antony Leung Kam-chung.
'I hope investors, especially small investors, will follow their own long-term investment strategy and not follow others blindly,' said Mr Leung. 'This would lead to some panic situations and lead to losses. I hope people will be aware of this.'
