Asian markets slump for second day

Asian markets plummeted for a second straight day and the dollar rose against regional units on growing fears that the global economy is on the verge of slipping back into recession. Seoul on Friday dived 4.35 percent, Hong Kong was 1.81 percent lower, Sydney lost 1.08 percent and Taiwan slumped 3.79 percent while Shanghai was 0.46 percent lower. The Asian sell-off followed heavy losses in the United States and Europe, which were caused by the Federal Reserve's comments on Wednesday that the US economy faced "significant downside risks", with the economy struggling with slow growth, high unemployment and a depressed housing market. The warning came after the Fed announced a $400 billion plan to boost the economy that would see it shift its shorter-term debt portfolio to longer-term bonds in a bid to lower long-term interest rates, a move that disappointed markets. On Wall Street the Dow slumped 3.51 percent -- marking its worst two-day fall since November 2008 -- the S&P 500 sank 3.19 percent and the tech-heavy Nasdaq Composite shed 3.25 percent. The Fed's forecast piled the pressure on already nervous investors, who were selling assets earlier in the week amid fears Greece is on the verge of default, which could spread to other economies and lead to another global financial crisis. "The selloff in risk assets threatens to become disorderly," Tim Condon, economist at ING, told Dow Jones Newswires. The dollar extended its rise against regional currencies as dealers shifted their attention away from risker assets. The Australian dollar was at 98.31 US cents, from $1.0017 late Thursday. The Aussie hit a record high above $1.10 just two months ago. The greenback, which in recent months was languishing near record lows against several Asian currencies, was up at Sg$1.3017 from Sg$1.2878, to 1,194.47 South Korean won from 1,179.57 and to Tw$30.61 from Tw$30.34. The euro edged up to $1.3546, from $1.3464 late Thursday in New York, while it was also at 103.21 yen, from 102.64. The dollar fetched 76.20 yen, from 76.25 yen. On oil markets New York's main contract, West Texas Intermediate for November extended its losses, dropping $1.09 to $81.60 in morning Asian trade, and Brent North Sea crude for November tumbled 0.85 cents to $106.34. Gold fetched $1,747.10 an ounce by 0200 GMT, down from the $1,765.40 it was at by 0900 GMT Thursday.