Asian equity market tumbled on Friday amid a severe downturn on Wall Street and fears of a global economic slowdown. The Shanghai Composite Index fell 2.2 percent to 2,626.42–the best performing index in the region. Hong Kong’s Hang Seng Index retreated 4.3 percent to 20,946.14, wiping out USD132 billion worth of value. Japan’s Nikkei Stock Average dropped 3.7 percent to 9,299.88. erasing USD136 billion in market value for the companies listed on the exchange. Taiwan’s Taiex index fell 5.6 percent to 7,853.13 for a weekly loss of more than 9 percent and South Korea’s Kospi declined 3.7 percent to 1,943, capping off a weekly loss of 8.9 percent. On Thursday the Dow Jones Industrial Average decline 4.3 percent and US stocks entered negative territory. A number of Asian policymakers voiced concern over a weakening global economy, with China’s foreign minister calling for an overhaul of the international financial system. South Korean officials said they would monitor financial markets and that the economy could be affected in the short term by global economic uncertainty.

The International Monetary Fund (IMF) said South Korea’s economic outlook remains “favorable.” In a regular report on South Korea’s economic health, the IMF said the South Korean economy would grow by 4.5 percent in 2011 and 4.2 percent in 2012. The country’s economy benefited from a broad-based recovery from the global economic crisis though rising inflation and global economic weakness could threaten recent gains. The IMF recommended South Korean policymakers take a series of steps to maintain the country’s economic health. “The immediate policy priority is to ensure a soft landing and safeguard financial stability–through proactive monetary tightening, greater exchange rate flexibility and ongoing fiscal consolidation,” the IMF said.

Malaysia’s exports in June rose 8.6 percent year over year to USD19.31 billion due to higher exports of palm oil, refined petroleum products, liquefied natural gas and crude petroleum. These products together accounted for 88 percent of exports in June. Malaysia’s trade ministry said exports rose 6.6 percent year over year in the first half of the year, while imports rose 9.6 percent. The country’s top five export destinations were Singapore, China, Japan, the US and Thailand. However analysts said that a global economic slowdown could cause exports to be weaker in the second half of the year.