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TOKYO: Fears of a global recession sent Asian stocks diving Thursday, with Tokyo leading the plunge - down more than 11 per cent to close alongside Wall Street's worst percentage drop in two decades.
Renewed panic erupted on global markets after a dismal US retail sales report stoked fears that the credit crunch will push some of the world's biggest economies into deep downturns.
"Don't stand in front of the freight train," said Sonray Capital Markets chief economist Clifford Bennett. "This is clearly a panic with further to go. The equity market game has fundamentally changed."
Japan's Nikkei dropped more than 1,000 points or over 11 per cent, wiping out Tuesday's record rally. By close, it was down 11.41 per cent, or 1089.02 points to 8458.45, the biggest loss in two decades.
Elsewhere as of 0615 GMT, Seoul's benchmark Kospi nosedived 9.44 per cent on closing, slumping 126.5 points to 1213.78. Hong Kong sank 7.58 per cent to 14785.60, Shanghai's Composite fell 3.45 per cent to 1925.95, while Taipei's weighted index shaved off 3.25 per cent on closing, down 170.29 points at 5075.97.
Indian shares lost 6.7 per cent at 10084.92, Bangkok's SET slipped 4.71 per cent, Jakarta edged down 4.59 per cent to 1450.62, Manila plunged 5.18 per cent to 2122.37 on closing, Kuala Lumpur dipped 3.74 per cent and Singapore's Straits Times Index dived 7.28 per cent, or 149.89 points to 1909.50.
In Sydney, the S&P/ASX 200 closed in the red, dropping 6.67 per cent, or 286.60 points to 4013.40, while in Wellington, the NZSX-50 was off 4.82 per cent at 2764.69.
The market has "picked up on the fear factor," said ABN Amro Morgans private client adviser Bill Bishop. "There is nowhere to hide."
The Dow sank 7.87 percent Wednesday after US retail sales fell much more than expected and Federal Reserve chairman Ben Bernanke said a recovery from the financial crisis would not happen right away.
Oil prices continued to fall, with Brent North Sea crude dropping below US$70 a barrel for the first time since June 2007.
World stock markets have fallen heavily this year as the global credit crisis brought down once-mighty Wall Street giants Bear Stearns and Lehman Brothers and prompted a raft of government bailouts of troubled Western banks.
The Dow has fallen 35 per cent in 2008, the Nikkei has lost almost 44 per cent and the London FTSE 100 is down about 37 per cent.
"The stock market is buried by recession fears," said Al Goldman at Wachovia Securities.
US retail sales slumped 1.2 per cent in September, a sign of deeper troubles for an economy hit by the squeeze in credit and the worst financial crisis since the Great Depression.
San Francisco Federal Reserve president Janet Yellen said the US economy was probably already in recession.
The dollar languished at around the 100 yen level as investors fled risky assets. Japan's central bank pumped 600 billion yen (US$6.0 billion) into the short-term money market to try to keep credit flowing.
Most analysts now say that a US recession appears virtually certain as a crippling credit crunch and housing meltdown drags down the rest of the economy despite a US$700-billion banking sector rescue plan.
Share markets around the globe were battered again. The London FTSE 100 shed 7.16 per cent Wednesday while in Paris the CAC 40 fell 6.82 per cent and the Frankfurt DAX gave up 6.49 per cent.
In Brussels, European Union leaders gathering for a summit warned that the financial crisis was far from over and that the real cost to jobs and growth was only now becoming clear.
The leaders of the Group of Eight (G8) major economies pledged in a joint statement to hold a global financial crisis summit "in the near future" with other key countries.
Leaders of the G8 - Britain, Canada, France, Germany, Italy, Japan, Russia
and the United States - are "united in our commitment to fulfil our shared responsibility to resolve the current crisis," they said.
Stocks across Latin America also tumbled Wednesday. Brazil's share market, the biggest in the region, finished down 11.39 per cent, while Argentine equities slumped 12.14 per cent.
- AFP/yb
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