Monday, August 29 2005 16:32 Hrs (IST) - World Time -

Hong Kong: Share markets across Asia and the Pacific tumbled today (August 29, 2005) as the price of oil finally broke the much-feared $70 a barrel mark on fears of a ferocious hurricane bearing down on the United States (US).

Dealers said the cost of crude had struck a level, widely seen as a break point, where oil costs begin eroding economic growth, weaken currencies, fuel inflation and pressure central banks into raising interest rates.

"It looks like oil has grabbed the spotlight as major Asian stock markets are losing ground," Yuanta Core Pacific Capital Management, Co-Assistant, Vice President, Jack Tam said in Taipei.

With Hurricane Katrina threatening the crude-producing Gulf of Mexico region in the United States, New York's main contract, light sweet crude for delivery in October, touched a high of $70.80 in Asian trade.

Analysts said the opportunity for profit-taking or switching out of equities and into the bond market could now be ripe with many markets hovering at record or multi-years highs.

Jakarta was worst hit, with the composite index plunging 37.811 points to 1,011.063 while in Tokyo the Nikkei-225 fell 119.96 to 12,319.52, reflecting a regional performance that stretched to Shanghai and Sydney.

"A concern for Japan is that the higher oil prices would slow down the general global economy, particularly the US economy, to pull down Japanese exports," said Masaaki Kanno, Tokyo-based Chief Economist at JP Morgan.