Wall Street drop send Asia stocks plunging

WA;; STREET EFFECT: The market in the region's largest economy, Japan, dipped as a stronger yen dimmed sales.

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Tokyo: Asia-Pacific stocks took dives Thursday amid bearish sentiment triggered by Wall Street's sharp overnight losses as well as a dismal global and regional economic outlook.

The market in the region's largest economy, Japan, also dipped as a stronger yen dimmed sales prospects among the country's export-oriented manufacturers.

The Nikkei 225 Stock Average fell 2.46 percent to close at 8,460.98. The benchmark index recovered significant ground after losing more than seven percent in morning trading and hitting a five-year low.

The broader Topix index of all first-section issues also fell 1.97 percent to 871.7.

Markets in other countries in the region saw far higher losses with the biggest in South Korea, where the Kospi index shrank 7.48 percent to 1,049.71 after falling as much as 9.4 percent earlier in the session. The Seoul exchange was hit as were others in the region as investors fled riskier emerging market stocks.

The won dropped to a 10-year low against the dollar and triggered worries about South Korea's overall economy.

Hong Kong's Hang Seng index shed 3.55 percent of its value to close at 13,760.49, dipping below 14,000 for the first time in three years.

In Australia, the ASX 200 plunged 4.3 percent to 3,974. The benchmark index has lost a third of its value so far this year.

Market leader BHP Billiton Ltd lost eight percent on the day and fellow resources company Rio Tinto Ltd shed 16 percent.

Falling commodity prices and fears of a global recession also hurt the local currency with the Australian dollar trading at 66 US cents, 1 cent off its five-year low.

Singapore's Straits Times Index took a 4.14-percent dip to 1,745.67, pacing losses in South-East Asia.

Investor sentiment was hit by regional losses Wednesday as well as overnight tumbles in the United States, where a series of depressing earnings reports offered more signs of a sharp economic downturn at home and abroad.

The Standard & Poor's 500 Index there dropped 6.1 percent and hit its lowest level since April 2003 while the Dow Jones Industrial Average lost 5.69 percent.

The Wall Street losses prompted a nearly four percent drop in Taiwan's Taiex index when it opened, but buying by government funds helped ease the slide to 2.72 percent by the close, when the Taiex stood at 4,730.51.

Losses in mainland China were more moderate with Shanghai Composite Index down 1.07 percent at 1,875.56. The Shenzhen Composite Index bucked the day's trend, rising 0.76 percent to 514.56 after the government announced measures to boost the lagging housing market.

In South-East Asia, the Philippine Stock Exchange's 30-share composite index slid 4.63 per cent, the Jakarta Composite Index fell 3.08 percent, the Ho Chi Minh Stock Index slumped 3.86 percent and the Kuala Lumpur Composite Index dropped 1.43 percent. Thailand's market was closed for a holiday.

In Vietnam, traders scrambled to sell after the previous day's plunges around the world and on fears that foreigners would withdraw from the local exchange because of its higher perceived risk despite the central bank's cut Tuesday of its prime interest rate from 14 to 13 percent.

"That fact that foreigners were net sellers over the past 10 sessions has made local traders worried," said Phan Hong Quan, director of Eurocapital Securities.

New Zealand's NZX50 index fell 3.18 percent to 2,807.34 despite an unprecedented one percentage-point cut in the central bank's benchmark interest rate to 6.5 percent - the third cut in 13 weeks.