Is it the deadly combination of a failed economics and politics that’s tarnishing Shining Asia’s rise to the top?
Coups, protests and resignations have been the flavor of the past month in Asia, which has seen uprisings spread across the region, from Pakistan to Japan. The potent combination of a rudderless society crippled with inflation woes, and plummeting stock markets has suddenly left Asia in limbo.
Stocks fell around the world Monday, led by Asian exchanges as concerns about a slowing global economy weighed heavily on the markets, AP reported. Adding to the crisis, were analysts who expect further near-term volatility and are warning foreign investors to stay away until the year-end.
‘We’re probably at the peak of political risk so it’s natural to expect the market to be really bad. It probably means we’d be getting closer to some resolution,’ Andrew Stotz, head of research at CLSA Securities in Bangkok, told Forbes, referring to the Thai stock market which has fallen to its lowest in 19 months and the state of emergency that has been declared in Bangkok following mass protests.
In Japan, following, prime minister Yasuo Fukuda resignation, the second prime minister to resign in a year, most top executives at major companies said they expect the abrupt resignation to have a negative influence on the future course of the economy and government policies, a survey conducted by the Nikkei business daily showed.
Japanese share prices fell 1.75 percent on Tuesda, hitting a five-month low after Prime Minister Yasuo Fukuda’s abrupt resignation threw Asia’s largest economy into another political crisis. The Nikkei-225 index fell 224.71 points to end at 12,609, the lowest close since March 31.
Similarly in Pakistan, post Musharraf’s resignation and Nawaz Sharif’s walk out, stocks fell over 4 percent to their lowest level in more than two years (26 months) in trading last week, as investors sold blue chips on political tension, forcing authorities to consider steps to stabilize the market. Finally, market regulators, imposed emergency trading limits to stem a decline that had seen the benchmark index tumble 42 per cent since April.
India as in China, South Korea and Vietnam, has seen erratic stock market activity, affected primarily by oil and inflation prices. Forbes reported that the benchmark Shanghai Composite Index closed down 3.01 percent on Monday, with financial stocks pressured in the absence of government policy announcements supporting the market over the weekend. Meanwhile, the Korea Composite Stock Price Index closed down 4.06 percent, hitting the lowest close in 17 months. The Indian stock market which has been rather erratic in the last few months, rose the most in a month this week, as lower oil prices soothed inflation concerns.
