Most Asian stock markets extend last week's losing streak while yen nears a
13-month high against the dollar.

(ASIA) MANILA, PHILIPPINES (OCTOBER 27, 2008) REUTERS -
Japanese stocks tumbled to 26-year lows on Monday (October 27) and
most other Asian markets fell heavily in chaotic trade as investors feared a
flurry of central bank moves would not be enough to stave off a global
recession.
In the Philippines, the stock market plummeted a record 12.3 percent on
Monday as investors continued to dump emerging market equities due to worries
of a sharp global downturn, which also battered other Asian markets.
Philippine shares tumbled to their lowest in more than four years, with
the main index closing at 1,713.8 points, down 239.7 points. It was the
biggest one-day point drop since February 2007, and the largest single-day
percentage drop on record.
"There's no other word for it but a bloodbath occurred," said
Alejandro Yu, president at RS Lim and Co. "There was a massive sell down
across the board, and it was broad-based."
The stock exchange halted trades late in the half-day session after the
main stock index fell 10 percent, triggering an automatic trading suspension
for 15 minutes. It was the first time a new circuit breaker rule was
applied.
Japan pledged fresh measures on Monday to try to shield the world's
second-biggest economy from the global financial crisis as the G7 issued a
statement on the financial crisis.
The measures and the G7 statement came as investors dumped banking
stocks on expectations they need fresh capital to offset losses in their stock
portfolios.
The Nikkei average hit a 26-year low just before Prime Minister Taro
Aso said the government will expand its bank bailout scheme, strengthen
regulations on short-selling of stocks and make it easier for stock holdings
employees to get hold of their stocks.
Tokyo's benchmark Nikkei share average briefly dropped as low as 7,603,
its lowest point since 1982.
The benchmark has lost almost a third of its value this month alone and
about half so far this year, hurt in part by the yen's recent rise to its
highest in nearly 13 years.
The rapid decline in share prices, as well as disorderly currency
moves, will hurt the Japanese economy, Japanese Prime Minister said.
"If we don't do something solid now, stock markets will have a
important impact on the real economy. In that sense we've got to think of all
the ways we can do something now," Aso said.
Underlining concerns about the banks, the economics minister on Sunday
(October 26) call for the country's bank bailout scheme to be increased
several-fold to nearly $110 billion.
Although Japanese banks have so far avoided the credit losses that tore
through Wall Street, investors now fear that lenders' extensive shareholdings
and market expectations that the economy will slip into recession could
unravel profits this year.
Aso is also planning to announce an economic stimulus package later
this week to support the economy.
That package, Japan's second in just a few months, is expected to
include a total of 5 trillion yen ($54 billion) in new spending, including 2
trillion yen in temporary income tax cuts.
Aso also denied that elections had been put off but did say that much
will depend on the financial markets.
"Yes, well, It will indeed depend a lot on whether the
government's plans are what the markets wanted or not," he told
reporters.
Seoul shares ended 0.8 percent higher, after swinging widely between
positive and negative territory with selling from jittery investors offsetting
a boost from the central bank's emergency rate cut.
The Korea Composite Stock Price Index ended up 0.82 points to close at
946.45 points, reversing losses in the last minute of trade. The KOSPI fell
nearly 5 percent at one point led by losses in telecom and transportation
stocks.
South Korea's central bank on Monday delivered its biggest-ever
interest rate cut and promised other measures to calm the panic that has been
driving down financial markets and rapidly eroding economic growth.
The Monetary Policy Committee slashed the base rate at a rare
unscheduled meeting as fears grow that Asia's fourth largest economy is
buckling under the strain of the global financial turmoil.
"We have decided to lower our base rate by 0.75 basis points from
5.00 percent to 4.25 percent," said Bank of Korea Governor Lee Seong-tae
at a news conference in Seoul.
China's main stock index sank more than 6 percent, led by large caps on
worries about lower-than-expected corporate earnings and weakness in overseas
markets.
The benchmark Shanghai Composite Index ended down 6.32 percent to
1723.351 points, it's lowest since October 24, 2006
The index slipped through technical support at 1,802 points, a low hit
in mid-September when the government stepped in with measures to support the
market.
The market appeared to draw little support from the Ministry of
Finance's announcement on Sunday (October 26) that a previous move to scrap a
5 percent withholding tax levied on interest income would apply to cash held
in individuals' brokerage accounts, in addition to bank deposits.
Some investors said such measures would not be able to stimulate the
country's moribund stock market as the global financial crisis deepens its
impact.
"Our stock market is now in line with the global markets. It's not
like the past where we could be isolated and play our own game. Now, huge
amounts of money can be flowing in and out of the domestic and international
financial system using various methods, so it is unavoidable that we are
impacted," said stock investor, Mr. Chen.
Hong Kong shares slid more than 12 percent on Monday, with blue chips
sliding for a fifth straight session.
The Hang Seng Index closed down 12.7 percent to 11015.84 points.
In Australia, shares fell 1.6 percent, extending their losing run to a
fourth session, with investors still dogged by fears the global economy is
heading into recession.
The benchmark S&P/ASX 200 index lost 60.2 points to close
unofficially at 3,809.2, its lowest close in four years, following a 2.6
percent slide on Friday (October 24).
Meanwhile, Australia's central bank intervened for a second day on
Monday to prop up the tumbling Australian dollar, after extreme investor risk
aversion saw the currency drop to multi-year lows.
The Reserve Bank of Australia (RBA) did not reveal how much it had
spent buying the local currency on Friday and Monday, or at what level it
intervened, saying the action was aimed at boosting liquidity in the market.

The last time the RBA moved to shore up the currency was in August
2007, when the U.S. subprime mortgage meltdown first set the global credit
crisis in motion.