Hong Kong - Asian stocks tumbled on Thursday, with Tokyo's market plunging 10%, after another dive on Wall Street as worse-than-expected data about the US economy heightened fears of a global recession.
Japanese Prime Minister Taro Aso blamed the renewed drop in markets on an "insufficient" US bank bailout plan totalling $700bn.
"Since it was insufficient, the market is again falling sharply," Aso told lawmakers at the upper house budget committee in parliament. He did not elaborate.
Tokyo's benchmark Nikkei 225 stock average slid 906 points, or 9.5%, to 8 641, after earlier falling as much as 10.3%. Hong Kong's key index lost 1 212.7 points, or 7.6%, to 14 785.6.
South Korea's Kospi was down 8.4%, Australia's benchmark was off almost 7% and Singapore's index lost about 6%.
Investors were unnerved by US data showing the country's retail sales fell 1.2% in September, almost double the 0.7% decline analysts expected - clear evidence that consumer spending, which accounts more than two-thirds of US economic activity, was weakening.
That was followed by more bearish data, from the US Federal Reserve, that the economy continued to slow in the early fall as financial and credit market problems took a turn for the worse.
All told, the readings provided ominous signs that the world's largest economy - a critical export market for Asia - was sliding into recession, if not already in one.
"Sentiment is deteriorating very fast. People are losing what little confidence they have on a day-by-day basis," said Jacky Choi, a Hong Kong-based fund manager at Value Partners Ltd, which manages about $5bn in Asia. "Everyone is very worried about the economy in the US and around the world."
In New York, the Dow Industrial average ended down 733.08, or 7.87%, at 8 577.91 - its second-biggest point loss ever.
The massive selling accelerated as the US Federal Reserve Chairperson Ben Bernanke warned in a speech on Wednesday that patching up the credit markets won't provide an instantaneous jolt to the economy.
Fears about the outlook for the world economy have overtaken the relief the markets breathed at the start of the week on the unveiling of a series of bank rescue packages from governments around the world.
On Tuesday, the US government followed Europe's lead and announced it will pump some $250bn into shares of its leading banks, including JP Morgan Chase & Co, Bank of America Corp, Goldman Sachs Inc and Citigroup Inc.
That money is part of the $700bn of public money the US government will use to buy bad mortgage-related securities and loans from troubled financial institutions.
The market tailspin help support bank lending rates Thursday, showing that companies were still scared to lend money to one another - one of the core problems of the financial crisis.
The Hong Kong interbank offered rate, known as Hibor, for three-month loans ticked up to 4.35 after easing the past couple days.
Meanwhile, insurance policies against companies failing to make good on their debt, known as credit default swaps, were more expensive - a signal that firms believe the risk of default is growing.
European markets sank on Wednesday, with Britain's FTSE 100 index dropping 7.2% to 4 079.59, while Germany's DAX ended down 6.5% at 4 861.63
Latin America stocks, too, plunged. Brazil's Ibovespa stock index sank 11.4% to 36 833. The sell-off triggered an automatic 30-minute suspension of mid-afternoon trading. Argentina's Merval index plunged 12.2%.
- AP