HONG KONG: Asian stock markets slumped on Thursday as the US Federal Reserve's latest multi-billion-dollar move to shore up the American economy was met with worldwide disappointment. The dollar strengthened against regional currencies as investors sought its safe-haven status after the US central bank warned of serious downside risks for the global outlook. The euro was also sent spinning to another 10-year low against the yen as risk aversion set in. Tokyo fell 2.07 per cent, or 180.90 points, to 8,560.26, Seoul dived 2.90 per cent, or 53.73 points, to 1,800.55, and Sydney plunged 2.63 per cent, or 106.9 points, to 3,964.9, its lowest in more than two years. Hong Kong tumbled 4.85 per cent, or 912.22 points, to 17,911.95, its lowest finish since July 2009, while Shanghai ended 2.78 per cent, or 69.90 points, lower at 2,443.06. The Fed said after a two-day policy meeting that it would shift $400 billion in its shorter-term debt portfolio holdings to longer-term bonds, a move it said would lower rates for mortgage holders and businesses. The plan -- nicknamed Operation Twist -- would also entice banks to put some of their idle reserves to work. However, in announcing the new plan, the Fed warned of "significant downside risks to the economic outlook", with the economy struggling with slow growth, high unemployment and a depressed housing market. "The Fed's economic view is sharply deteriorating and there seems to be little it can do as a next step with Republicans calling on the Fed not to intervene," Yutaka Miura, a senior technical analyst at Mizuho Securities, told Dow Jones Newswires. And Mitul Kotecha, a strategist at Credit Agricole, said: "The overwhelming tone is likely to remain negative, especially as Operation Twist is unlikely to change the dynamic of a weak growth trajectory for the US and developed economies over the coming months." Wall Street plummeted on the news. The Dow lost 2.49 per cent, the S&P 500 dropped 2.94 per cent and the Nasdaq shed 2.01 per cent.

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