Asian stocks tumbled to the lowest in two months, extending a global selloff that wiped US$1.5 trillion from the value of global shares, on concern US growth will stall.
On the region's largest stock market in Tokyo, the Nikkei 225 index fell for a fifth day, tumbling 575.68 points, or 3.34 percent, to finish at 16,642.25 points. Since reaching a nearly seven-year high last Monday, the index has plummeted 8.64 percent over the last five trading sessions.
Markets in Hong Kong, Australia, the Philippines, India and South Korea were all down sharply yesterday, continuing their slide from last week, when a 9 percent plunge in Chinese stocks triggered a drop on Wall Street and other global markets.
Analysts said the declines could continue for at least awhile longer.
"It still looks bad tomorrow, since the drop in the Asian markets may pull down markets in Europe and the US later in the day," said AB Capital Securities research director Jose Vistan. "It's snowballing."
The Korea Composite Stock Price Index fell for a fourth day, sinking 2.7 percent, while Australia's benchmark S&P/ASX200 index fell for a fifth day, tumbling 2.3 percent.
In India, the market opened 3.7 percent lower.
"Basically the fall is because global markets are seeing a downtrend," said Devina Mehra of First Global, a Mumbai brokerage, adding that the fast rise in India's market in recent years was "overdone and expectations were too high."
In China, the Shanghai Composite index fell a more modest 1.6 percent, but foreign-currency denominated "B shares" tumbled after officials denied rumors those stocks might be merged with the mainstream Chinese-currency "A shares."
A lack of market-boosting news as the Chinese national legislature began its annual session also appeared to sap buying enthusiasm.
The yen's recent surge hit Japanese exporters including Canon, Sony and Toyota Motor. The dollar fell to ¥115.60 from ¥116.75 late on Friday in New York and from above ¥120 less than a week ago.
Analysts said some of the market's drop appears to be fueled by speculation that investors are unwinding so-called "yen carry trades," in which investors borrow yen at Japan's low interest rates to invest in other markets to seek higher returns. But as the yen appreciates, investors stand to see their gains eroded when those borrowed funds are converted back to yen.
"The market seems to have entered a full-scale downward trend, on worries over likely unwinding of yen carry trades, as cued by the sharp strengthening of the yen," Hyundai Securities analyst Yang Chang-ho said.
But the biggest money managers and strategists on Wall Street seemed not worry. They say the four-year bull market in US stocks will persist even after the Standard & Poor's 500 Index plunged last week on concern a slowing economy will hurt corporate profits.
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