Monday October 8, 2001

HONG KONG - Shares fell across the Asia-Pacific region early this morning, with the U.S. and British strikes on targets in Afghanistan throwing fresh uncertainty into markets that were already jittery.

Traders had expected military action in response to the Sept. 11 terror attacks in New York and Washington - but the timing was a surprise, and many investors were staying out of the market until they could see Wall Street's reaction.

"I think we'll just have to wait and see how long this attack will last," said David Kim, general manager of international business at Seoul Securities. Prices were off by 0.2 percent in the South Korean capital by late morning, after largely recovering from a steeper early decline.

"Right now, I think people are nervous," Kim said. "They think if this attack is a long one, the economic recovery in the U.S. would be delayed."

The early damage was more severe in other markets after the strikes by U.S and British warplanes and rockets yesterday night against targets in an around Afghanistan's main cities.

Hong Kong shares showed a loss of 2.5 percent in the first few minutes of trade, while prices were off by 2.5 percent in Singapore, 3.9 percent in Manila, 1.9 percent in Taipei and 2 percent in Kuala Lumpur in the late morning.

Australian shares had slid by 1.4 percent by early afternoon, while New Zealand shares fell by 0.4 percent.

Asia's top stock exchange, Tokyo, was closed Monday for a public holiday and the New York markets don't open until after exchanges across Asia have finished for the day.

Gold prices rose $2 an ounce early Monday in Hong Kong, to $293.50.

Australian Treasurer Peter Costello suggested shares may have already seen the worst of the damage inflicted by the Sept. 11 terror attacks on the World Trade Center and the Pentagon.

"It looks now as if the stock markets which fell very, very significantly - percentage terms in America as large as the Great Depression - have bottomed and come back," Costello told a Melbourne radio station. "I don't see anything in the events of last night that will affect that."