Stock markets around the world dipped in response to a 10 percent drop in the Hong Kong market. The crash resulted from a continuing monetary crisis in Southeast Asia that forced Hong Kong to raise its interest rates to stabilize its currency. After a background report by Ian Williams of Independent Television News, Jim Lehrer discusses what the impact of today's drop in Hong Kong and the United States with Lawrence Krause of the University of California-San Diego's School of Pacific Rim Studies; Robert Hormats, vice chairman of Goldman Sachs International; and Bob Harrington, a stock trader with PaineWebber.

IAN WILLIAMS, ITN: Whether out of pain or just relief a sigh swept the trading floor at the end of the worst day in the history of the Hong Kong Stock Exchange. Millions of dollars were wiped off the market's value. The share prices were savaged, down by 16 percent at one point. Economic confidence, which had weathered the return to Chinese rule here, has taken a battering. Brokers were shaken by the scale of the collapse.

JAMES OSBORN, ING, Barings: Very, very bad. On top of the falls earlier this week, this now means that what we've seen in terms of valuations wiped off, confidence gone, this is a lot worse than the ‘87 stock market crash and even the fall we had in Hong Kong after Tiananmen Square.

IAN WILLIAMS: Hong Kong has millions of small investors and many gathered at brokerages. They watched in disbelief as their investments melted away. The market has lost almost a third of its value this week.

UNIDENTIFIED MAN: Make most of us puzzled, very puzzled. We lost a lot of money, and then some.

IAN WILLIAMS: Today's fall was triggered by an overnight rise in interest rates, designed to defend the value of Hong Kong's currency, which is pegged to the U.S. dollar, a peg the government says it will not abandon.

TUNG CHEE HWA, Chief Executive, Hong Kong: There is tremendous determination on the part of the Hong Kong government to maintain the linked exchange rate. We have every confidence this can be done and will be done.

IAN WILLIAMS: Currency and share markets have been in free fall across Asia. One of the worst hit has been Thailand, where protesters are demanding the resignation of the prime minister. The Thai market collapse was the first, quickly followed by Malaysia, where the government blamed the turmoil on foreign currency speculators. Indonesia has seen its currency fall by more than a third, and the Philippine peso has also taken a tumble. Even the mighty Singapore dollar has been shaken, and Taiwan, economically close to Hong Kong, was forced to devalue its currency this week. But Hong Kong had regarded itself as immune from the turmoil. Companies from Mainland China have been rushing to list their shares in Hong Kong, and investors have queued for hours to buy them. One new issue this summer was a thousand times over-subscribed. But today China-related stocks, among them newly listed China Telecom, plummeted as investors dumped shares, irrespective of their connections.

Until a week ago Hong Kong was congratulating itself for having largely escaped the economic turmoil that hammered the other tiger economies. But today the meltdown reached Hong Kong. One broker described it as not so much a fall but a bungee jump. And tonight nobody's guessing when the market might bounce back.