Friday, August 5, 2011

ASIA-Shares to dive as investors seek safety amid gloom

WELLINGTON: Asian stocks look set for a heavy sell off on Friday, as global markets tumbled on the twin fears of a spreading European debt crisis and slowing economic outlook.

Stocks were dumped, with Wall Street suffering its worst session in two years, and analysts are predicting more to come with the market seen entering a corrective phase.

The main Wall Street indices were all battered ' the Dow lost 4.3 percent, the S&P 500 shed 4.8 percent and the Nasdaq lost 5.1 percent.

Volume was at its highest in more than a year while the CBOE Volatility index, the market's so-called fear index, jumped 35.4 percent to its highest in more than a year.

Asian stocks listed on Wall Street fell 5.7 percent while world stocks, as measured by the MSCI world equity index, fell 4.1 percent.

British shares fell 3.4 percent while European shares lost 3.2 percent as the European Central Bank signaled it was buying government bonds in response to a deepening European debt crisis.

The Italian stock market plunged on fears it would be the next euro zone economy to succumb to a crippling debt burden, taking its losses to more than 30 percent since February.

Investors were seen preparing for a weak U.S. payrolls report due later on Friday, which will further stoke fears of a double-dip recession.

The yen steadied after its sharp selloff in the wake of the central bank's intervention to stem the currency's rise.

Japanese markets are set to slide, with Nikkei futures traded in Chicago 375 points below the last closing level in Osaka.

Australian stocks are picked to fall to two year lows, with share price index futures down 175 points to 4,085, 4.5 percent below the close of the underlying S&P/ASX 200 index. ' Reuters

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