HONG KONG (MarketWatch) -- Japanese stocks got thrashed across the board Thursday, with the Nikkei 225 Average down by more than 11% for its worst single-day performance in more than two decades, due to fears about a U.S. recession and a global economic slowdown.
In a session where a 10% drop in stocks was commonplace, the Nikkei slumped 1,089.02 points, or 11.4%, to 8,458.45, although it ended above a 51/2-year closing low it set last week.
The decline was its worst percentage loss since Oct. 20, 1987, when it tumbled 3,836.48 points, or 14.9%, to 21,910.08.
The broader Topix index finished 9.5% down at 864.52.
In Seoul, the Kospi index plummeted 9.4% to 1,213.78, as financial shares suffered steep losses a day after Standard & Poor's placed seven financial institutions on CreditWatch for downgrades. The Korean won also fell sharply against the U.S. dollar on worries about the country's weakening economic outlook.
In Hong Kong, the Hang Seng Index dropped 7.6% to 14,785.60, while the Hang Seng China Enterprises Index lost 9.8% to 7,117.26.
On mainland China, the Shanghai Composite declined 2.9% to 1,936.81.
"Certainly, the outlook is for a global recession, but you could argue that the markets' pricing last week already reflected that," said David Cohen, director of Asian economic forecasting at Action Economics in Singapore. "There is no reason why the world economy has to melt down. There are still some stabilizing influences, including the lowering of oil prices."
Australia's S&P/ASX 200 index lost 6.7% to 4,013.40, with shares of resources giant Rio Tinto tumbling nearly 16% in Sydney on concern that global demand for commodities was weakening. Declining crude-oil prices added to the selling pressure on BHP Billiton, dragging down its shares more than 13%.
India's Sensitive Index, or Sensex, tumbled 6.5% to 10,102.47 by late morning.
Elsewhere, New Zealand's NZX 50 index gave up 4.8% to 2,764.69, and Singapore's Straits Times index lost 7.2% to 1,911.40.
Taiwan's Taiex shed 3.3% to 5,075.97.
Cohen added that it "wouldn't be surprising" if governments in Asia decided to increase spending or introduce other stimulus measures such as tax cuts to support their slowing economies.
"I think the Asian economies are less vulnerable to financial instabilities now than they were 10 years ago," said Cohen. With a few countries in the region running current-account surpluses and accumulating international reserves, "Asia has a little more flexibility and they don't have to fear that their financial position will crumble," he added.
Resource stocks hammered
Shares of Rio Tinto tumbled 15.9% in Sydney a day after the resources giant said the global financial crisis will force it to delay a planned sale of $10 billion of assets. The company added that China wasn't immune to the global downturn and it may freeze capital spending as it reassesses demand for commodities with a global slowdown looming. See full story
Energy-related stocks tumbled after November crude-oil futures fell as much as $4.09 to $74.54 a barrel on the New York Mercantile Exchange overnight, ending at their weakest level in more than a year. The front-month contract recently dropped as much as $2.04 to $72.50 a barrel in electronic trading.
Shares of BHP Billiton gave up 13.1% and Woodside Petroleum ost 5.5% in Sydney.
