Asian stock markets plummeted in early trade on Friday following carnage in the US and European markets amid fears the world was heading towards another financial crisis.
Major markets in Japan, Australia and South Korea tumbled by at least four percent in the opening minutes of trade as already-fragile investor confidence was hammered by the eurozone debt crisis and more weak US economic data.
"It's going to be very ugly end to an even uglier week," IG Markets analyst Ben Potter said in Sydney, adding that all sectors were expected to take a battering.
Australia's benchmark S&P/ASX 200 was 174 points lower at 4,102, while in Tokyo the Nikkei index plunged 395.09 points, or 4.09 percent, to stand at 9,264.09.
In Seoul, the benchmark KOSPI index fell 81.30 points, or 4.0 percent, to 1,937.17 -- the lowest level since March.
The winds of fear blew into Asia overnight from the United States, where the Dow Jones Industrial Average suffered its worst one-day drop since December 2008 to close 4.3 percent lower at 11,383.68, erasing all this year's gains.
The broader S&P 500 dropped 4.8 percent to end the day at 1,200.07, while the tech-heavy Nasdaq Composite dived 5.1 percent to 2,556.39.
London's benchmark FTSE 100 index fell 3.43 percent, retreating to levels last seen in September 2010 while in Frankfurt the DAX fell 3.40 percent, and France's CAC 40 dropped 3.90 percent.
"We're seeing the erosion and now the loss of confidence, confidence in the economy, confidence in the market, confidence in the policy makers. It's all showing up," said US-based Hugh Johnson, of Hugh Johnson Advisors.
Weak jobs data out of the United States on Thursday fuelled concerns among some analysts that the world could be heading towards another recession following the 2008 financial crisis.
The US Labor Department reported that weekly claims for unemployment benefits remained at a high 400,000 last week.
"There is a deep concern about global growth and of the state of play in the United States in particular," said City Index analyst Giles Watts.
"Traders are growing increasingly concerned about a sharp slowdown in US economic activity in the third quarter."
In Europe, investor sentiment remained plagued by worries that debt-laden Italy and Spain could be engulfed by the fast-moving eurozone debt crisis.
The European Central Bank announced Thursday that it would resume emergency credit-easing measures, some of which were last enacted at the height of the financial crisis.
But the ECB's efforts still failed to restore confidence. The risk premium investors demand to buy Spanish 10-year bonds over safe-bet German debt shot back up to near a record high on Thursday.
The eurozone debt crisis has put Italy and Spain under huge pressure in recent weeks after Greece, Ireland and Portugal had to be bailed out by the European Union and the International Monetary Fund.
"The fear of a double-dip recession with the slowdown in the US and the sovereign debt situation in Europe is having everybody biting their nails," said Adam Sieminski, chief energy economist of Deutsche Bank.
Gold scored a new record at $1,681.72 per ounce on the spot market in New York as investors flocked to the precious metal, regarded as a safe bet in times of economic turmoil. It later retreated to $1,647.57.
Prices for US government bonds, another safe haven, also rose.
The yield on the 10-year Treasury dropped to 2.46 percent from 2.60 percent late Wednesday, while that on the 30-year bond fell to 3.72 percent from 3.87 percent. Bond prices and yields move in opposite directions.
Oil prices in New York and London both fell more than five percent amid fears that a slowdown could take a deep bite out of global energy demand.
Among other markets to open early in the Asia Pacific on Friday, New Zealand shares slumped 2.4 percent.
Share
