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Asia accelerates towards inevitable recession

Two weeks after September 11, the sell-off in the Asian equity markets was unabated. Hong Kong’s Hang Seng was down 10.9%, Korea had dropped 10.8%, and Singapore had plunged 18.1%. And Japan’s Nikkei fell through the psychological 10,000 barrier. Chris Cockerill reports on what comes next

Tokyo Stock Exchange: over the
cliff down through 10,000

If the downward equity market trend across Asia continues at the current relentless pace, equity portfolio losses in Asia three weeks on from the attacks on the US will exceed the $300 billion wiped from the board in the 1997 Asian financial crisis.

Nevertheless, panic has yet to pervade Asia's financial centres. Statesmen and bankers aren't crying out about another possible meltdown. "Recession" is mumbled, but "crisis", thankfully, is rarely mentioned. As Dong Tao, CSFB's director and chief regional economist, says: "Before Tuesday, my view was that Asia was not suffering a financial crisis but a growth flop. And my view hasn't changed. We will not experience a repeat of the 1997 meltdown." It's testament to a region that only three years ago sat traumatized, defeated, with begging bowl in hand.

The financial dislocation that wrought so much havoc in 1997-98 is absent this time.

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