HONG KONG (MarketWatch) -- Asian markets sold off Thursday on fears about the impact of a global recession, with South Korean, Japanese and Hong Kong indexes plunging to multi-year lows as investors dumped shares across the board.
Japan's benchmark Nikkei 225 Average dropped to its lowest level in more than five years as exporters such as Mazda Motor Corp. and Nintendo Co. were slapped by a rally in the yen and after steep losses on Wall Street overnight.
In Hong Kong, the Hang Seng Index dropped below the psychologically-crucial 14,000-point level for the first time since July 8, 2005.
"Investors are shying away from equities and moving towards the bond markets. It's no longer a matter of where you're going to get growth from, it's more about how you're going to protect your capital," said Andrew Sullivan, a sales trader at Main First Securities in Hong Kong.
"You've just got investors getting very worried, with very strong and its' very difficult to exporters to see any growth going ahead," he added.
During the session, the Nikkei 225 Average dropped as much as 7.6% to touch a low of 8,016.61, a level it hasn't seen since May 22, 2003, before recovering. It was recently down 5.5% at 8,198.03, on top of a 6.8% plunge Wednesday. The broader Topix index fell 4.7% to 847.16.
South Korea's Kospi dropped as much as 10.3% at one point during the session to reach a level it hasn't seen since July 8, 2008, before recovering. The index lost 9.1% at 1,031.18 in afternoon trading.
The South Korean won also plunged against the U.S. dollar, which recently bought 1,415.9 won, compared with the previous close at 1,361.5 won.
The Hang Seng Index, meanwhile, fell 4.5% to 13,625.96, while the Hang Seng China Enterprises Index gave up 7.4% to 6,208.59. On mainland China, the Shanghai Composite lost 2.6% to 1,845.91.
Elsewhere, Australia's S&P/ASX 200 index fell 4% to 3,988 and New Zealand's NZX 50 index gave up 3.2% to 2,807.34, although the country's central bank cut its benchmark interest rates by one percentage point to 6.5% earlier in the day.
Singapore's Straits Times index fell 4.3% to 1,743.56, Taiwan's Taiex declined 3.1% to 4,713.85 and Philippines' PSE Composite gave up 4.6% to 1,995.92.
India's Sensitive Index, or Sensex, dropped 4% to 9,765.76 in early trading.
Regional detail
Japanese exporters were sold-off on the yen's rally against major global currencies and fears that sales in Europe might be hurt by the euro's weakness.
Shares of Mazda plunged 16.2% and Nintendo lost 10.3%, while Honda stock skidded 8.6%.
Shares of Nissan Motor Co. slumped 8.2% in line with the market. Earlier in the day, Bloomberg News reported that the company isn't willing to put up cash for an alliance with U.S. automaker Chrysler, as it's averse to a tie-up that would weaken its financial position. Nissan and alliance partner Renault were proposing to acquire around 20% of Chrysler and such an offer was now before private equity firm Cerberus Capital Management, The Detroit News reported Wednesday.
In Tokyo currency trading, the U.S. dollar bought 97.07 yen, compared with 98.93 yen late Wednesday, while the euro changed hands for 123.84 yen, down from 127.683 yen the previous day.
Regional financials, resource and technology shares also suffered big losses as investors dumped stocks on fears about a global recession. In Tokyo, Mizuho Financial Group sank 11.2%, Inpex Holdings Inc. skidded 11.4% and Kyocera Corp. lost 8.4%.
In Sydney, shares of Rio Tinto plunged 15.3% and BHP Billiton plummeted 8.7%, while Australia & New Zealand Banking Group ) gave up 5.5%.
In Seoul, steelmaker Posco slid 10.3% and Samsung Electronics lost 9.3%, while shipbuilder Hyundai Mipo Dockyard Co. stumbled 14.4%.
In Hong Kong, shares of market heavyweight China Mobile lost 4.3%, while HSBC Holdings gave up 3.7%.
Shares of Citic Pacific , however, rose 2.2% on bargain buying after the stock lost two-thirds of its value during the previous two sessions, after the company announced it faced foreign exchange losses of up to $1.9 billion.
December crude-oil slumped $5.43 to $66.75 a barrel on the New York Mercantile Exchange for its lowest closing level for a front-month contract since June 13, 2007. The contract was recently unchanged in electronic trading.
On Wall Street, the Dow Jones Industrial Average fell 5.7% to 8,519.21, as fears of a global recession sparked widespread selling. The S&P 500 index plunged 6.1% to finish at 896.78, its lowest level in more than five years, while the Nasdaq Composite lost 4.8% to 1,615.75.
