Bangkok
09 October 2008
Asia's stock markets are calming down after days of heavy selling. Economists and market analysts say coordinated interest rate cuts in the United States and other countries helped steady investor nerves. But, as Ron Corben reports from Bangkok, many people in the region are concerned the global economic crisis is going to hurt their livelihoods.
Interest rates cuts by central banks in South Korea, Hong Kong and Taiwan on Thursday followed cuts in the United States, Europe and China overnight.
Anusorn Buranankanonda, managing director of BT Asset Management in Thailand, says the cuts had a calming effect.
"The markets are still very skeptical about what the real impact is going to be, but at least from the psychological viewpoint this rate cut has already improved some sentiment," Anusorn said. "Most markets were panicked yesterday; although there was some selling pressure but the pressure was not as intense as yesterday."
On Thursday, the panic selling seen for most of the week eased. Hong Kong's Hang Seng Index gained more than three percent, and Seoul's Kospi was up more than half a percent. Other markets saw losses, but they were far milder than on Wednesday. In Tokyo, the Nikkei average lost just half a percent, after plunging nine percent a day earlier.
Around the world, central bank chiefs and finance ministers have struggled for weeks to stem the credit crisis and soothe shaky financial markets. Even China's communist-run government joined the effort.
Gang, a spokesman for China's Foreign Ministry, explained Thursday what Beijing is doing.
Qin says that in facing this international financial crisis, the Chinese government has stated its position on many occasions, that the international community should maintain confidence, work together, to overcome this difficulty. He says the central bank and other Chinese authorities are keeping close communication and contact with other countries' authorities.
Economists say that despite efforts to avoid a financial meltdown, the global economy is likely to slow in the months ahead, especially in the U.S. and Europe.
In Asia, workers and business owners are worried.
Chittiprapa sells shirts in a Bangkok street market, a business that is heavily dependent on tourists from Europe and the U.S.
"Now America there is a problem; I think not more tourists come to Thailand," Chittiprapa said. "About the next two to three months the problem more than this, not more tourists come to Thailand. I think now everyone, everywhere will have a problem."
The International Monetary Fund earlier this week cut its global growth outlook to 3.9 percent for 2008 - the lowest in six years and bordering on what the IMF considers potential recession levels.