Asian stocks slump further on economic fears

HONG KONG , August 9, 2011 (AFP) – Asian stock markets plunged further Tuesday, deepening sharp losses brought on by the historic credit downgrade of the United States and the debt crisis in Europe. As gold soared to record levels and crude oil prices fell, Asian stocks tumbled despite G7 and G20 pledges to bolster the global economy and European Central Bank action on eurozone debt.

In Japan, the benchmark Nikkei-225 index of the Tokyo Stock Exchange fell 4.07 percent, or 370.58 points, to 8,726.98 in midmorning trade, adding to a 2.18 percent plunge on Monday.

South Korean shares also shot lower, dropping more than five percent, with the benchmark Kospi index down at 1,775.78.

“The global sell-off in equities is likely to continue, but we are close to seeing a selling climax,” Hiroichi Nishi, general manager at SMBC Nikko Securities, told Dow Jones Newswires.

As fear continued to dominate following Standard & Poor’s unprecedented downgrade of the United States on Friday, Australian share prices fell 4.4 percent, losing 173.2 points to 3,812.9.

New Zealand, the first in the Asia-Pacific to open, dropped 3.1 percent. With the US Federal Reserve board meeting later Tuesday, a