TOKYO, Nov 2, 2007 (AFP) – Asian stocks suffered heavy losses in early trade Friday after initial euphoria on Wall Street over the US interest rate cut faded quickly as fresh credit jitters rattled global markets. Indices around the region fell by as much as nearly three percent after tumbles in New York and Europe on renewed worries about the fallout from the mortgage and credit woes that wreaked havoc on world markets in August.
In early trade, Hong Kong slumped 2.9 percent, Tokyo fell 1.7 percent, Beijing shed 2.0 percent, Sydney dropped 1.8 percent and Singapore was down 2.0 percent.
The downturns came after oil giant ExxonMobil missed Wall Street profit forecasts and analysts at CIBC World Markets downgraded Citigroup and Bank of America, the two biggest US banks, on worries about a credit squeeze.
CIBC said Citigroup needed to raise 30 billion dollars in capital over the near-term, also dampening the market sentiment.
“As the fallout from the subprime loan problems will likely linger for a while, the market may remain jumpy on reports related to these problems,” said Kazuhiro Takahashi, a manager of equities marketing at Daiwa Securities SMBC.
Elsewhere in the region, Kuala Lumpur sh