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Asian stocks plummet as Citigroup cuts 52,000 jobs in bid to stay afloat
Asian stocks fell on Tuesday after Citigroup cut 52,000 jobs in a dramatic move to save itself and downbeat policymaker comments reflected worsening economic conditions that will unlikely improve until well into 2009.
- Agencies
- Published: 08:35 November 18, 2008
- Image Credit: Bloomberg
- Citigroup Inc., the US bank with the most employees, plans to eliminate more than 50,000 jobs and cut expenses by 20 percent from their peak as the global economy contracts
Hong Kong: Asian stocks fell on Tuesday after Citigroup cut 52,000 jobs in a dramatic move to save itself and downbeat policymaker comments reflected worsening economic conditions that will unlikely improve until well into 2009.
Despite relatively stable conditions in short-term credit markets, banks were struggling to contain climbing losses on bad loans, with Citi, the second-largest US bank, reducing 15 percent of its workforce and HSBC laying off an additional 500 staff in Asia after announcing 1,100 job cuts in September.
"Investors find it hard to invest in the financial sector unless signs emerge that the global economy has started to improve," said Kazuhiro Takahashi, general manager of the equity marketing department at Daiwa Securities SMBC in Tokyo.
Asia-Pacific stocks outside of Japan fell 1.85 percent, bringing year-to-date losses to around 58 percent, according to an MSCI index. Asia's losses have outpaced the all-country world index, which is down 47.5 percent in 2008.
Japan's Nikkei share average was down 1 percent, led by Softbank Corp, the country's third-biggest mobile phone operator.
Hong Kong's Hang Seng index dropped 1.9 percent, with Hong Kong Exchanges & Clearing stock the biggest percentage decliner for a second day, off 5.5 percent.
Falling 2009 economic growth expectations have been feeding through to financial and commodity markets, as investors price in much slower demand next year. Indeed, Japan's Economics Minister Kaoru Yosano said it was hard to expect the world's No. 2 economy to log positive growth in the next fiscal year starting in April.
The yen remained underpinned by risk aversion on Tuesday as Tokyo shares slipped following a fall in US stocks on deepening concerns about a global recession.
The U.S. dollar was little changed at 96.46 yen, while the euro slipped 0.1 percent to 121.90 yen. The euro eased 0.1 percent to $1.2642.
The Korean won was quoted at 1,414.9/6.1 per U.S. dollar, down from Monday's domestic close of 1,409.0.
The South Korean currency has lost more than a third of its value against the dollar this year on expectations global economic turmoil would worsen the country's international balance of payments and economic growth.
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