Beijing - Arabstoday
Asian stocks have fallen on Friday, driving towards their worst weekly losses since 2008, after a sharp sell-off in the US and Europe. The G20 said they were ready to preserve stability in the financial markets after Thursday\'s falls, when European indexes fell about 5%. But South Korea\'s main Kospi index shed 5.7%, while Australia\'s ASX lost 1.6%. The latest market slump was sparked by a Federal Reserve warning about the weak outlook for the US economy. A number of gloomy comments about global growth, particularly from the International Monetary Fund (IMF) and World Bank, then combined to sour market sentiment further. On Thursday, Christine Lagarde, head of the IMF, said the global economic situation was entering a \"dangerous place\". Robert Zoellick, the World Bank president, said separately he thought the world was in a \"danger zone\". These comments, along with weak economic data out of China, sent Taiwan\'s main index sliding by 3.6% and Hong Kong\'s down 2%. Japan\'s Nikkei index is closed for a holiday.Commodity markets also took a hit, with copper sinking 7.5% and Brent crude oil futures posting their biggest single-day loss in six weeks. Global miners were among the biggest losers on concerns about slowing demand for minerals. Rio Tinto fell 3.3%, after losing 10.8% in London trade, and BHP Billiton lost 2.3% after falling 8.3% overnight. \"Anything sort of leveraged to the global growth story is being sold off hard because people are questioning whether or not we are going to see a global recession,\" said Cameron Peacock from IG markets. The negative sentiment weighed on markets despite attempts by policymakers to inject some urgency into their attempts to fix the European debt crisis. The G20 countries, which are also meeting in Washington alongside the IMF and World Bank, said they were ready to take action. \"We commit to take all necessary actions to preserve the stability of banking systems and financial markets as required,\" G20 officials said in a communique after a dinner meeting to discuss the European crisis. Analysts said the markets were expecting some concrete action from the group, and so the comments were unlikely to alleviate the current turmoil. \"The bottom line is they need to follow up with action. Until markets see coordinated action, they\'re not going to get a lot more confident,\" said Shane Oliver, head of investment strategy at AMP Capital.It may not have calmed the markets, but the statement from the G20 helped the euro recover losses on Friday. The euro strengthened 0.5% against the US dollar to $1.3530, rebounding from a 0.8% drop yesterday. The currency also climbed 0.6% versus the yen to 103.24 yen, the first gain in six days. US stock futures and oil rebounded as well. Asian currencies, however, weakened with the Korean won sinking to its lowest level in a year. Authorities in South Korea and India said they were ready to intervene in markets to support their currencies. Indonesia\'s central bank said on Thursday that it was taking steps to support the rupiah.Separately, the major emerging nations that form the Brics countries - Brazil, Russia, India, China and South Africa - said they may lend money to the IMF and other financial institutions to help ease global financing issues. Analysts said that concerns about the political and policy response will affect markets globally. \"We\'ll certainly be caught in the downdraught of negative sentiment for markets today,\" said Michael McCarthy, chief market strategist from CMC Markets in Sydney. \"The concern here is that the sentiment is weighing on lending markets and... we could see a freezing of credit markets in Europe.\" However, he added that in the future, Asia\'s better economic growth may help markets bounce back. \"Looking forward there is the opportunity, I think, for a much better performance from the Asian region, mainly because of the superior growth in the economies of Asia.\"