Hong Kong falls by 2.9 percent; Tokyo is down by 1.4 per cent. US Congress is expected to adopt US$ 700 billion plan but the latter is not expected to improve market conditions.

Hong Kong (AsiaNews) – Asian stock exchanges continue to lose ground even if famous US

financial rescue plan is closer to passing. Experts talk about a “mild recession”.

Hong Kong fell 2.9 per cent on Friday as lower oil prices hammered energy stocks while shares in Hang Seng Bank sank 5.9 per cent, adding to Thursday's nearly 9 per cent fall.

In Tokyo the Nikkei average fell 1.4 per cent on Friday to hit its lowest point in more than three years on fears that the global economy will worsen even if the US Congress passes a US$ 700 billion bank rescue bill.

“Investors expect the US House to approve the bailout, but even if that happens, it would have a neutral impact on the market as its effectiveness is still questionable,” Takahiko Murai at Nozomi Securities told Reuters.

“With the G3 (US, Japanese and EU) economies expected to contract modestly and China's economy likely moderating to near-trend growth in coming quarters, we expect the Hong Kong economy to slide into a mild recession,” said Qian Wang, analyst with JP Morgan.

Energy and metal stocks tumbled on Friday after commodity prices fell overnight on fears the global economic slowdown will hurt demand.

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