HONG KONG – Asian stock markets dropped Wednesday, with benchmarks in Japan and Hong Kong losing nearly 2 percent, as concern that rising bank losses will cripple the world economy overshadowed the inauguration of U.S. President Barack Obama.
Asia's downward lurch followed Wall Street, where investors returning from a holiday reacted with alarm to a rash of negative news about Western banks like Royal Bank of Scotland and sent key stock measures tumbling by more than 4 percent.
Sentiment across the region was dour even as Obama assumed power Tuesday vowing to "begin the work of remaking America," with hopes fading his administration can bring about a quick recovery in the world's largest economy through a massive stimulus package planned later this year.
"While it was a great day to hope, and fun to watch a part of history, investors are very much in tune to the reality that there is not a lot this new president can do to help Asia, or the world, let alone the United States, in the very near term," said Kirby Daley, senior strategist at Newedge Group in Hong Kong.
In the latest signs of strain on Asian economies amid slump, Singapore slashed its 2009 economic forecast Wednesday for a
