AP
Asian Stocks Drop After U.S. Declines
Thursday August 9, 10:29 pm ET
Japan's Nikkei and South Korea's Main Stock Index Fall Sharply After Wall Street Slide

TOKYO (AP) -- Asian stocks fell sharply in early trading Friday following steep declines in U.S. stocks over fears of spreading turmoil from subprime mortgages.

The Nikkei 225 index fell 448.64 points, or 2.61 percent, to 16,721.96 during the morning session on the Tokyo Stock Exchange. The broader Topix index of all shares on the exchange's first section sank 48.94 points, or 2.91 percent, to 1,634.87.

The Korea Composite Stock Price Index fell as much as 70.33 points, or 3.7 percent, to 1,838.35 before rebounding slightly.

The plunge came after the Dow Jones industrial average fell 387.18, or 2.83 percent, to 13,270.68 in New York on Thursday after a French bank announced it was freezing funds that invested in U.S. subprime mortgages, deepening fears of a credit crunch.

Amid Friday's decline, the Bank of Japan said it injected 1 trillion yen ($8.39 billion) into money markets to curb rises in a key overnight interest rate.

The injection followed similar moves by its European and U.S. counterparts overnight.

The European Central Bank provided more than $130 billion to money markets, the bank's biggest infusion ever. The U.S. Federal Reserve also added a larger-than-normal $24 billion in temporary reserves to the U.S. banking system.

In South Korea early Friday, blue chip stocks Samsung Electronics Co., the country's largest corporation, and Posco, the world's fourth-largest steelmaker, were down 2.6 percent and 3.6 percent, respectively.

Moves in international markets affect the Korean index, said Kang Moon-sung, a strategist at Korea Investment and Securities Co.

"So no one is confident this level is (the) bottom," Kang said.

The index has been on a tear for most of this year, rising as much as 40 percent. Last month, the benchmark closed past 2,000 for the first time.