Asia Plunges on Failed U.S. Auto Rescue

Shares of Japanese automakers Toyota and Honda plunged on the news.

Author:: Joseph Woelfel
Publish date:: Dec 12, 2008 1:01 AM EST

Shares of Japanese automakers Toyota and Honda plunged on the news.

Asian stocks plunged Friday on news that a $14 billion bailout of U.S. automakers collapsed in the Senate after the United Auto Workers refused to accede to Republican demands for swift wage cuts.

Japan's Nikkei 225 stock average fell 4.1% to 8361.27, while the Hang Seng index in Hong Kong fell 6.9%. The S&P/ASX 200 index in Australia declined 2.4%.

The rescue of U.S. automakers collapsed late Thursday night after bipartisan talks broke down over GOP demands that the United Auto Workers union agree to steep wage cuts by 2009 to bring their pay into line with Japanese carmakers.

Auto stocks in Asia plummeted on the news. In Tokyo,

Toyota

(TM) - Get Report

dived 10.6% and

Honda

(HMC) - Get Report

slid 12.9%. South Korea's

Hyundai

shed 8.5% and

Kia Motors

was off 8.4%.

Premarket futures in the U.S. were indicating extremely weaker losses when Wall Street opens Friday.

Following some initial indecisiveness, stocks in New York fell Thursday as dismal job numbers, an unexpectedly widened deficit, and the federal bailout of automakers

General Motors

(GM) - Get Report

Ford

(SYMBOL)

, and

Chrysler

weighed on investors' minds.

The

Dow Jones Industrial Average

tumbled 196.33 points, or 2.2%, to 8565.09. The

S&P 500

slipped 25.65 points, or 2.9%, to 873.59, and the