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Asian markets tumble; Nikkei falls 10 percent

JEREMIAH MARQUEZ | October 15, 2008 11:46 PM EST | AP

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A pedestrian walks under an electric market board in Tokyo, Thursday, Oct. 16, 2008. Japan's key stock index plunged more than 10 percent in early trade Thursday, hit by another dive on Wall Street and growing recession fears. (AP Photo/Katsumi Kasahara)

HONG KONG — Asian stocks plummeted Thursday, with Tokyo's market plunging more than 10 percent, after another dive on Wall Street as worse-than-expected data about the U.S. economy heightened fears of a global recession.

Japan's benchmark Nikkei 225 stock average slid 911 points, or 9.6 percent, to 8,635.56, after earlier falling as much as 10.3 percent. Hong Kong's key index lost 963.65 points, or 6 percent, to 15,034.65.

South Korea's Kospi was down 7.2 percent, Australia's benchmark was off 6.3 percent and Singapore's index lost about 6 percent.

Investors were unnerved by U.S. data showing the country's retail sales fell 1.2 percent in September, almost double the 0.7 percent decline analysts expected. Other readings, released by the U.S. Federal Reserve, indicated the economy continued to slow in the early fall as financial and credit market problems took a turn for the worse.

The figures were ominous signs that the world's largest economy _ a critical export market for Asia _ was sliding into recession.

"Sentiment is deteriorating very fast. People are losing what little confidence they have on a day-by-day basis," said Jacky Choi, a Hong Kong-based fund manager at Value Partners Ltd., which manages about US$5 billion in Asia. "Everyone is very worried about the economy in the U.S and around the world."

In New York Wednesday, the Dow Industrial average ended down 733.08, or 7.87 percent, at 8,577.91 _ the biggest percentage drop since the 8 percent drop on Oct. 26, 1987, which followed Black Monday, the Oct. 19 crash that sent the blue chips down 22.6 percent in a single session.

The massive selling accelerated as the U.S. Federal Reserve Chairman Ben Bernanke warned in a speech Wednesday that patching up the credit markets won't provide an instantaneous jolt to the economy.

Oil prices continued to fall. Light, sweet crude for November delivery slid US$1.48 to US$73.06 in Asian trade on the New York Mercantile Exchange.

European markets sank Wednesday, with Britain's FTSE 100 index dropping 7.2 percent to 4,079.59, while Germany's DAX ended down 6.5 percent at 4,861.63

In Latin America, too, stocks plunged. Brazil's Ibovespa stock index sank 11.4 percent to 36,833. The sell-off triggered an automatic 30-minute suspension of mid-afternoon trading. Argentina's Merval index plunged 12.2 percent.

Fears about the outlook for the world economy have overtaken the relief the markets breathed at the start of the week on the unveiling of a series of bank rescue packages from governments around the world.

On Tuesday, the U.S. government followed Europe's lead and announced it will pump some $250 billion into shares of its leading banks, including JP Morgan Chase & Co., Bank of America Corp., Goldman Sachs Inc. and Citigroup Inc.


AP reporter Shino Yuasa contributed to this report from Tokyo.

Filed by Dave Burdick  |  Report Corrections