Asian, European markets slide on U.S. credit worries

TOKYO -- Asian and European shares dipped Wednesday as markets continued to battle jitters over a credit crunch started by problems in the U.S. subprime credit sector and as broader concerns emerged about the U.S. economy.

In Asia, Tokyo and New Zealand benchmarks tumbling to their lowest closes in nine months. In Europe in early trade, the U.K.'s FTSE 100 index fell 0.9% shortly after the market opened. France's CAC 40 benchmark fell 1.21%, and Germany's DAX fell 0.8%.

In Asia, some economists and dealers said the gyrations on Asian stock markets were short-term. Some issues could even be good bargains, they said, given the strong growth and earnings data from China, Japan and other regional economies.

The Nikkei 225 stock index, the benchmark for Asia's biggest stock market, plummeted 369.00 points, or 2.19%, to 16,475.61, its lowest since Dec. 8, as financial issues got hammered by the nervousness about a fallout from the U.S. subprime mortgage crisis.

Japanese export issues also took a battering from the strong yen. Worries have been growing about a slowdown in the U.S. economy, fueled by faltering profit forecasts by major retailers.

Weak American spending would be a blow to the Japanese and other Asian economies, which are all still heavily dependent on exports to the U.S.

In New Zealand, the benchmark NZX-50 index slipped below the psychological 4,000 barrier before ending down 1.5% at 4,004.46 — its lowest closing since December 2006.

"It's not a particularly pretty day for the market. World markets are all just following each other at the moment and they're quite skittish," said UBS equities director Paul Nicolson in New Zealand.

Midafternoon, Hong Kong's Hang Seng Index was down 3.0% and Singapore's Straits Times Index was down percent.

The benchmark index in the Philippines closed 4.1% lower and Taiwan's Weighted Price Index fell 3.6%.

"We remain confident that things can calm down," said David Cohen, director of Asian forecasting at Action Economics in Singapore. "There is enough momentum in the global economy it should ultimately sustain the solid growth in world GDP through the middle of the year."