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Asian markets fall on fears of double-dip recession

08-04-2011 08:41 BJT

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After Wall Street got slaughtered in their last session, Asian stocks followed suit today. Fears are back of a double-dip recession, as major economies show signs of slowing and the US struggles to reign in spending. Indeed, analysts say the outlook is dire and warn there are more headaches ahead.

In the 11th hour, the US raised its debt limit, avoiding a potentially catastrophic default.

Analysts say the good news was short-lived, and already investors are looking to problems ahead.

An electronic board showing falls in major market indices around the world outside a brokerage in Tokyo on Wednesday. Photograph: Yuriko Nakao/Reuters

Professor Zhao Xijun from Finance & Securities Institute of Renmin University said, "So it seems to be good news for Chinese and global investors for the time being, because there has been a solution to the uncertainties of the markets. However, in the long run, debt expansion and instability still linger, so the same problem may arise again when the new limit is reached in the future."

Meanwhile, the pessimism about the global economy further weighed on Asian markets. Japan's Nikkei 225, South Korea's Kospi, and Hong Kong's benchmark Hang Seng Index all fell on Wednesday.

Naomi Fink, head of Strategy in Jefferies Japan Ltd. Said, "That is a frustration for investors who were expecting a bit more of a pop upwards in stock and risk assets in general after the debt deal. But I think that now there are concerns that global growth may not be as strong as previously thought. "

Analysts say that although the US narrowly avoided a default, investors are worried the US economy will slip into a new recession.

Editor:Li Wanran |Source: CNTV.CN

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