2007年VOA标准英语-Asian Stocks Continue Plunge on Credit Fears

Chinese investors chat at a private security company, 16 Aug 2007 in Shanghai, China



There was no let-up Thursday in the wave of selling on Asian stock markets. As VOA's Heda Bayron reports from Hong Kong, investors are haunted by fears of a global credit crunch 2 triggered by the U.S. home loan crisis.

South Korea's KOSPI recorded the region's biggest drop Thursday - 125 points, or nearly 7 percent. It was the biggest one-day point decline in the KOSPI's history.

Hong-rae Cho, head of research at the Korean Investment and Securities Company in Seoul, says individual investors and large fund managers are all dumping South Korean shares.

He says everyone fears the worst from widespread problems with so-called "sub-prime" home loans in the United States.

"I think this is the worst day," he said. "Everybody is under the impact of the sub-prime crisis in the U.S. market."

The KOSPI closed at 1,691. In Japan, the Nikkei 225 index was down 2 percent, at 16,148. Hong Kong's Hang Seng index tumbled 3.3 percent to 20,672. China's Shanghai Composite Index finished more than 2 percent lower at 4,765.

The U.S. sub-prime loan crisis came about after years of loose lending that allowed people with poor credit ratings to borrow money to buy homes. As U.S. interest rates have risen, many of those borrowers have defaulted, and some lenders have gone bankrupt, creating a wider credit problem in the United States.

Investors are afraid banks, hurt by these defaults, will become conservative in their lending, and funding for businesses will disappear as a result.

Some Asian central banks, following the U.S. Federal Reserve and the European Central Bank, have injected billions of dollars into the market in recent days to maintain liquidity 3 and reduce such concerns.

The regional sell-off has prompted government leaders to give assurances that their countries' economic fundamentals are strong.

The South Korean government urged investors not to panic after Thursday's fall.

Government spokesman Chun Ho-seon says South Korean financial authorities will take a leading role in taking care of any problems.

Australian Prime Minister John Howard also tried to reassure 4 investors Thursday.

"Our financial institutions are very stable and the underpinnings are such that we are better to able to handle changes and shocks of this kind," he said.

Analysts 5 say the exposure by Asian banks and other corporations to the U.S. sub-prime loan market is limited. Nevertheless, some of the region's home lending companies says they are already having difficulty finding new loans.