Asia markets plunge after US rout

The benchmark Nikkei 225 index was down 3.19 per cent or 706.12 points to 21,386.06 shortly after the open.
The benchmark Nikkei 225 index was down 3.19 per cent or 706.12 points to 21,386.06 shortly after the open.PHOTO: EPA-EFE

TOKYO (AFP) - Tokyo's Nikkei plunged more than 3 per cent at the start of trade on Thursday (Oct 25) while Australian stocks sank, after a punishing session on Wall Street that saw major US indices wipe out all their 2018 gains.

The benchmark Nikkei 225 index was down 3.19 per cent, or 706.12 points, to 21,386.06 shortly after the open, while the broader Topix index was down 2.62 per cent, or 43.32 points, to 1,608.75.

Hong Kong shares plunged almost 2 per cent in the opening minutes of trade, in line with a collapse across Asia.

The Hang Seng Index sank 1.91 per cent, or 483.06 points, to 24,766.72.

The benchmark Shanghai Composite Index dived 2.40 per cent, or 62.37 points, to 2,540.93, while the Shenzhen Composite Index, which tracks stocks on China's second exchange, tumbled 2.99 per cent, or 37.47 points, to 1,259.75.

Australia's leading share index tanked at the open, wiping out most of this year's gains, as local traders picked up on the global sell-off.

The benchmark ASX 200 was down over 2 per cent shortly after the morning open, trading at its lowest levels since April, while South Korea's Kospi index tumbled 2 per cent.

Singapore's Straits Times Index fell sharply after opening and was down 1.4 per cent as of 9.20am.

"The market environment is tough," Mr Makoto Sengoku, market analyst at Tokai Tokyo Research Institute said, pointing to the sharp drops in US stocks.

"Sentiment has worsened due to a mixture of various negative pieces of news," he said.

Investors are facing the expectation of higher United States interest rates, which would boost borrowing costs, anxiety over the fallout from the murder of Saudi journalist Jamal Khashoggi, and an ongoing budget dispute between Italy and Brussels.

A US data report on Wednesday showed home sales fell to their slowest pace in nearly two years, while forecasts from big companies AT&T, UPS and Texas Instruments disappointed.

"This mess of bad factors has made it difficult for markets to seize a chance to turn up," Mr Sengoku told AFP.