PARIS (Reuters) – Asian stock markets suffered one of their worst trading sessions in years, and some indices even decades, on Monday, as a broad sell-off sparked by fears of a U.S. economic recession following weak manufacturing and employment data.
In Tokyo, the Nikkei index plunged 12.4 percent, its biggest daily percentage drop since Oct. 20, 1987, according to LSEG data. But its point decline of 4,451.28 points was larger than the decline on “Black Monday” and the largest on record.
The Japanese index has fallen 27% since its peak on July 11, which now places it in bear market territory.
In this context of risk aversion, the surge in the yen, considered a safe haven asset, has put additional pressure on the Japanese stock market.
Meanwhile, the Taiwan Stock Exchange fell 8.4%, its biggest single-session decline since November 20, 2000, according to LSEG data.
At a press conference, the exchange’s chairman Lih-Chung Chien said the exchange remained alert to the global situation and was cooperating with regulators to maintain market stability.
In South Korea, the Kospi index fell 8.8%, its biggest drop since October 2008 and the global financial crisis. The plunge was so great – the index lost as much as 10.8% – that it triggered a trading restriction for the first time in four years.
In South Asia, the Singapore Stock Exchange lost 4.4%, heading for its worst session in four years, while stock markets in Indonesia and the Philippines lost 3.3% and 2.6% respectively.
“What we’re seeing now is a situation where the market is looking at what’s happening in the US macroeconomy as ticking the recession box,” said Robert Carnell, head of Asia Pacific research at ING.
“We’ve gone from inflation falling fast enough and the Fed easing in September, to an economy that’s going off the rails and a Fed that won’t be able to stop the situation from getting worse.”
In Europe, major stock indices are plunging by more than 2% while futures on US indices are signalling a fall at the opening, up to 3.5% for the technology-heavy Nasdaq.
(Written by Blandine Hénault)
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