Asian stocks slide on bank worries

The New Age

Most Asian stock markets fell sharply Tuesday following heavy losses on US and European markets, where fresh jitters emerged over the health of the US banking sector.
Worries about rising bad debts overshadowed news of record earnings at Bank of America, prompting what analysts described as long overdue profit-taking.
Tokyo ended down 2.39 per cent, Sydney dropped 2.43 per cent and Hong Kong was down 3.72 per cent at midday, after the Dow Jones Industrial Average slumped 3.56 per cent in New York on Monday.
European bourses were mixed in early trade, a day after losing between two and four per cent. Paris shed 0.18 per cent but London opened 0.08 per cent higher.
Investors appeared to shrug off roaring profits from government-rescued Bank of America - the latest in a line of encouraging corporate results from US banks including Citigroup, JPMorgan Chase and Goldman Sachs.
Some analysts warned that markets have further to fall before the current correction ends.
'The rally in risky assets, in particular stocks, since early March has been excessive and only partially justified by fundamentals,' said Dariusz Kowalczyk, chief investment strategist at SJS Markets in Hong Kong.
The US and European banks are still in a mess, he added.
'Concerns over systemic stability are likely to re-emerge, which should drag down the entire market,' Kowalczyk said.
Many analysts said markets were ripe for a pullback. The Dow Jones index had risen 22.7 per cent over the past six weeks, the best performance over a similar period since 1938.
'We are witnessing an appropriate degree of reality. While the pace of global economic contraction is slowing, the fact of contraction appeared to have been ignored,' said Societe Generale analyst Patrick Bennett.
Investors brushed aside news that Bank of America recorded a profit of 4.2 billion dollars in the first quarter as the results were boosted by one-time gains.