Bank Fears: Asian Shares See Sharp Fall

The new concerns about the banks worldwide and deepening recession in the US caused some sharp drops in Asian stocks on Tuesday.

On Tuesday trading, Japan’s Nikkei index ended 2.2% down with 8,711, while Hang Seng in Hong Kong fell 3.7% in day after trading.

This sharp drop was noticed after reports from Bank of America, the largest US bank, in which it showed some great amounts to cover from bad debt.

The reports urged some new fears of further losses in banking sector in the coming days and its impact was quite evident in various stocks markets worldwide.

On Monday, Bank of America shares closed 24 percent down, while Citigroup, its rival, dropped 18 percent.

These sharp falls were also a result of President Obama’s weekend address in which he said that the current economic strain would last for some time.

According to market analyst Hideyuki Ishiguro, “it would be surprising if banks remain all right after all that”

“But at the same time despite all these worries and gloom, there is a silver lining and some improvements signs can be seen out there particularly in China,” he added.

Some analysts are of the view that investors have concerned regarding further capital that some institutes may require to keep at bay from additional losses.

The bank of America’s report, which caused that sharp drop in Asian stocks, indicates that it has put aside $13.4bn for credit losses recovery.