Subprime Fears Pelt Asia's Markets

Investors lose faith in the idea that China and India can withstand a slowdown in the U.S. and punish Asian shares
A pedestrian walks past an electronic share-prices board in downtown Tokyo, Jan. 16, 2008. The Tokyo Stock Exchange's benchmark Nikkei 225 index fell 468.12 points to close at 13,504.51, a level not seen since October, 2005. KAZUHIRO NOGI/AFP/Getty Images

So much for the theory that a U.S. slowdown won't hurt Asia. For months, many Asia watchers have predicted that strong demand in China and India would allow the region to "decouple" from the U.S., Asia's traditional engine of growth. For today at least, investors lost faith in that theory. Stock markets across the region plunged Jan. 16, following scary news from the U.S. about huge losses at Citigroup (C), disappointing numbers from Intel (INTC), and surprisingly weak U.S. retail sales figures for December.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.