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Thursday, September 13, 2001

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Financial markets reeling, dollar sharply weaker

HONG KONG, SEPT. 12. Stock prices in Asia plummeted on Wednesday on fears the terrorist attacks in the U.S. could deal a severe blow to the ailing U.S. and Japanese economies, while European markets opened generally higher.

The dollar was sharply lower, while gold, traditionally a haven in times of crisis, soared.

Financial officials across Asia pledged to provide support for banks and other financial institutions stricken by the aftermath of the attacks in New York and Washington.

In Japan, Asia's largest market, the benchmark 225-issue Nikkei Stock Average plunged beneath the key 10,000-point mark for the first time in 17 years as traders dumped shares. The Nikkei closed down 682.85 points, or 6.63 per cent at 9,610.10.

The Bank of Japan Gov. Mr. Masaru Hayami said on Wednesday the central bank would take all necessary steps to ensure financial market stability.

The U.S. markets were closed on Tuesday and Wednesday in the wake of the attack on the heart of U.S. finance. It was unclear when they would reopen.

European markets, which sank late Tuesday after the attack, were mixed in early trading. Some traders were encouraged by comments by the European Central Bank President, Mr. Wim Duisenberg, emphasing determination to support regional banks and markets.

In Frankfurt, the Xetra DAX index of German blue chips rose by 2.3 per cent to 4,369.66 points in early trading. The FTSE 100 index of British blue chip shares gained 0.97 and the Paris Stock Exchange's CAC 40 index slipped 0.13 percent.

Gloom dominated in Asia, where markets have already taken a beating from the global economic slowdown.

Hong Kong's blue-chip Hang Seng index plunged as much as 12 per cent from Tuesday's close to its lowest level in two and a half years. It closed down 923.74 points, or 8.9 per cent, at 9,493.62. On Tuesday the Hang Seng had edged higher to 10,417.36, snapping a four-day losing streak.

The U.S. dollar was trading at 119.38 yen on the Tokyo foreign exchange market on Wednesday, down 2.34 yen from late Tuesday and level with its late New York level on Tuesday.

In Hong Kong, gold surged more than U.S. $14 early in the day. It closed at $279.50 an ounce on Wednesday, up $7.95 from Tuesday's close of 271.55.

No segment of the globe appeared immune from financial turmoil: South Africa's stock exchange, Africa's largest, opened 6 per cent lower. Bargain hunting and strength in shares of gold producers help bring it back to just 3.4 per cent below its Tuesday close later in the morning.

The stock markets in Turkey and Cypress were also closed amid fears financial turmoil could further damage their crisis- stricken economies.

In Asia, markets in Taiwan, Malaysia and Thailand were closed. Those markets in the region that were open were reeling.

Singapore's benchmark Straits Times Index on Wednesday plummeted 116.31 points or 7.4 per cent to 1,450.45, a 29-month low.

- AP

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