TOKYO :Asian stocks plunged on Thursday, led by a 10 percent drop in Tokyo, after growing fears of a global recession left Wall Street reeling from its worst percentage drop in two decades.
Renewed panic eruped 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 painful recessions.
"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 stock index dropped almost 1,000 points or more than 10 percent in early trade, wiping out most of Tuesday's record rally.
Stocks lost about six percent in Seoul, Singapore and Sydney. Shanghai dropped almost four percent at the opening.
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.
US retail sales slumped 1.2 percent 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 stock market is buried by recession fears," said Al Goldman at Wachovia Securities.
The dollar languished below 100 yen as investors fled risky assets. Japan's central bank pumped 600 billion yen (6.0 billion dollars) 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 700-billion-dollar banking sector rescue plan.
Share markets around the globe were battered again. The London FTSE 100 shed 7.16 percent Wednesday while in Paris the CAC 40 fell 6.82 percent and the Frankfurt DAX gave up 6.49 percent.
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 fulfill 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 percent, while Argentine equities slumped 12.14 percent.
NEWS BY AAJ
