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Losses on Wall Street rip through Asian financial markets

AP  |  Singapore 

A stock market rout that started on Wall Street rolled through Asia, driving China's benchmark to a four-year low on Thursday and knocking down indexes in Japan, Korea and

The Shanghai Composite index plunged 5.2 per cent to its lowest level since November 2014 and Japan's fell by an unusually wide margin of almost 4 per cent. Markets across Southeast recorded similar declines.

"Equity markets were pulverized today," with investors in "full out retreat," of said in a commentary. The "latest sneeze" from Wall Street "could morph into a global markets pandemic," he added.

Investors are wary of possible further U.S. interest rate hikes, which will raise the cost of corporate borrowing and weigh on economic growth.

On Wednesday, said the Federal Reserve "is making a mistake" with its campaign of rate increases. "I think the Fed has gone crazy," he charged.

"Equity investors are surprised by the pace at which rates have risen," said Marcella Chow, at in a report.

Sentiment also has been dampened by the spreading US-Chinese tariff fight over Beijing's The cut its outlook for global growth this week, citing interest rates and trade tensions.

The is due to release a report that some analysts suggest might change the stance on China's policy.

Chow said it was unclear whether the Treasury might label a "manipulator" a status that could trigger penalties or whether it could be "another pre-text for the next round of tariffs."

Adding to potential US-tensions, the Justice Department announced Wednesday it arrested an of on charges of trying to steal trade secrets from US companies.

Tokyo's gave up 3.9 per cent to 22,590.86 and the Shanghai Composite index lost 5.2 per cent to 2,583.46. Hong Kong's Hang Seng index shed 3.7 per cent to 25,220.67. The in fell 4.4 per cent to 2,129.67. Australia's slipped 2.7 per cent to 5,883.80. Stocks plunged in and fell across Southeast

On Wednesday, US stocks slumped as concerns over rising interest rates and trade tensions caused a sell-off in technology and The Dow Jones Industrial Average suffered its worst loss in eight months, falling 3.1 per cent to 25,598.74.

The index sank 3.3 per cent to 2,785.68. The Nasdaq composite, which has a large contingent of technology stocks, was 4.1 per cent lower at 7,422.05. It has fallen 7.5 per cent in just five days. The index of smaller-company stocks shed 2.9 per cent, to 1,575.41.

and Amazon, the two most valuable companies in the S&P 500, each had their worst day in 2 years. slipped by 4.6 per cent while lost 6.2 per cent.

has soared 50 per cent this year, but its stock has fallen 14 per cent from its all-time high in early September.

Francis Tan, an at UOB Private Bank, believes that the markets will pick up in the US session. "The valuation of US stocks, especially tech stocks, is still pretty high and there could be some profit taking actions now," Tan explained.

The dollar rose to 112.34 yen from 112.27 yen late Wednesday. The rose to USD 1.1546 from USD 1.1523.

fell. US crude gave up 70 cents to USD 72.47 a barrel. The contract settled at USD 73.17 in Brent crude, the international standard, dropped 76 cents to USD 82.33 a barrel.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, October 11 2018. 14:20 IST