Asian stocks dive as panic sweeps global markets

TOKYO, September 30, 2008 (AFP) – Stocks plunged in Asia Tuesday as fears of escalating financial turmoil triggered panic selling on world markets after Washington policymakers unexpectedly shot down a US financial rescue plan.

In Tokyo and Hong Kong stocks were some five percent in the red despite calls from policymakers for markets to keep their cool after a record plunge on Wall Street.

The shock rejection by Congress of the 700-billion-dollar bailout package raised fears of a deepening of the financial and economic turmoil that has rocked global markets and brought down some of the world’s top banks.

Investors rushed to dump equities and move into safe havens such as bonds and gold. In Tokyo the Nikkei plunged by almost five percent to hit a three-year low, before clawing back slightly.

Hiroichi Nishi, equities chief at Nikko Cordial Securities, said he had been shocked by the rejection of the package by Congress.

“The market is exploring where the bottom is now,” he said, adding that all eyes were on whether the US House will vote on the rescue plan again or the White House will come up with new measures.

Hong Kong share prices opened down 5.6 percent. Taipei lost 6.2 percent, while Seoul slum