From News Services
Friday, August 29, 1997; Page K02

Stock and currency markets in Asia fell sharply Thursday and continued to fall in early trading today amid a deepening loss of confidence in the ability of governments in the region to tackle their severe economic problems.

The regionwide skid follows weeks of turmoil on foreign-exchange markets, where several Asian currencies have been battered after their governments loosened restraints.

Shares in the Philippines, Singapore and Hong Kong are leading the losses on the region's bourses, while the Malaysian ringgit continues to tumble against the U.S. dollar, dragging the Singapore dollar and Thai baht lower with it.

Tokyo stock prices also fell sharply this morning, dropping temporarily below a key 18,000-point level for the first time in four months before recovering some of the losses as traders moved to scoop up bargains.

About 10 minutes into trading today, Hong Kong's blue-chip Hang Seng index had fallen by 759.30 points, or 5.1 percent. It recovered slightly after about one hour to 14,307.10 points.

Singapore's Straits Times Index tumbled 5.4 percent to its lowest in more than four years, extending yesterday's losses.

Malaysia's benchmark index was off 2.9 percent. Yesterday the Malaysian index tumbled as much as 8.3 percent before rallying to close down 4.2 percent.

South Korean stocks dropped for a fourth day, driving the benchmark stock index to its lowest in more than three months, following a report commercial banks will scrap a plan established to prop up failing companies. At midday today in Seoul, the benchmark Korea composite stock price index was off 1.84 percent, to 716.9.

On Thursday , Philippine stocks plummeted, taking their biggest one-day dive ever and wiping out $5 billion of market value, an amount equivalent to 7 percent of the economy's annual output. The downward spiral continued today, hitting a second day of record lows. At mid-morning, the 30-share Philippine Stock Exchange Index was at 1898.15, down 173.82 points, or 8.4 percent, from Thursday's close.

Investors said the worst is far from over. "As long as the regional currencies remain weak, investors will suppress the desire to buy Asian stocks," said Colin Lee, managing director of Chartered Asset Management Pte., which handles $78 million in Asia stocks.