Asian stock markets were thrown into a tailspin Tuesday as flustered investors fearing a possible global recession continued to flee stocks. Hong Kong slid 6 percent and South Korea at one point plummeted nearly 10 percent.
Oil prices tumbled to their lowest in almost a year below $79 a barrel on expectations that a slowing global economy could crimp demand for fuel. The dollar was lower against the yen and the euro.
The sell-off, which adds to sharp losses in the past few days, comes after the Dow Jones industrials fell 634.76 points on Monday, the sixth-worst point decline for the Dow in the last 112 years. It was Wall Street’s first day of trading after Standard & Poor’s downgrade of the US credit rating.
Wall Street appeared headed for further losses Tuesday. Dow futures were off 174 points, or 1.6 percent, at 10,552 and broader S&P 500 futures shed 18.30 points, or 1.7 percent, to 1,093.30.
Michael McCarthy, chief strategist at Sydney-based stockbroker CMC Markets, attributed the market turbulence to fears that the struggling US economy is quickly losing momentum.
“We’re clearly in fear territory,” McCarthy said. “The major driver here seems to be weakness in the US economy. There are fears that it’s starting to stall and if that’s the case, the whole global growth scenario could fall over.”
Japan’s Nikkei 225 index sank 2.3 percent to 8,892.12. Hong Kong’s Hang Seng plunged 6 percent to 19,258.51—the sixth-straight trading day of losses.
Japanese export shares continued to capsize on a strengthening yen, which makes products more expensive overseas. Consumer electronics giant Sharp Corp. dropped 3.7 percent, while Panasonic Corp. lost 2.1 percent.
The country’s powerhouse vehicle makers were also battered. Toyota Motor Corp. lost 3.4 percent, while rival Honda Motor Corp. slid 3.3 percent. Nissan Motor Corp. sagged 2.8 percent.
Trading on South Korea’s Kospi was briefly suspended after it sank sharply—at one point down 9.7 percent—before paring losses to a 4.8 percent fall to 1,780.33.
Hynix Semiconductor, one of the world’s leading memory chip makers, shed 5.5 percent, while Samsung Electronics, the top global manufacturer of flat screen televisions, crumbled 4 percent.
Oil companies were stung by falling crude prices. Hong Kong-listed PetroChina Co., the publicly traded unit of China’s biggest oil and gas company, lost 8.8 percent. Sinopec, Asia’s biggest oil refiner by volume, lost 8.6 percent.
Bucking the trend was Australia’s benchmark S&P/ASX-200 index, which reversed earlier losses to rise 0.2 percent at 3,994.80. Taiwan’s TAIEX was 0.1 percent higher.
Jackson Wong, vice president of Tanrich Securities in Hong Kong, said the sell-off was creating opportunities for sophisticated investors to buy at bargain prices. What was unclear, he said, was when those investments might bear fruit.
“It’s still very hard to predict how the US market will do,” Wong said. “When the dust settles, if the situation doesn’t get worse in the US or Europe, the situation will rebound. But the US has to stabilize.”
Worries about the US economic recovery have been building since the government said that economic growth was far weaker in the first half of 2011 than economists expected. Intensifying concerns were reports showing that the manufacturing and services industries barely grew in July, although job growth was better than economists expected last month.
Investors are also worried that Italy and Spain could become the next European countries to have trouble repaying their debts. Greece, Ireland and Portugal have already received bailout loans because of Europe’s 21-month-old debt crisis.
The fears have pushed investors to shun Spanish and Italian bonds, which have led to higher yields and in even higher borrowing costs for the two countries.
The European Central Bank stepped in Monday and bought billions of euros worth of their bonds. The move helped to lower yields on Spanish and Italian bonds, at least temporarily.
Benchmark oil for September delivery fell $2.63 to $78.66 a barrel in electronic trading on the New York Mercantile Exchange.
That is the lowest settlement price of the year for crude, but it’s still higher than the $71.63 per barrel low of the past 12 months. Oil hit that on August 24 of last year, when a combination of disappointing economic news and abundant supplies drove down prices.
Crude fell $5.57, or 6.4 percent, to settle at $81.31 per barrel on the Nymex on Monday.
In currencies, the dollar weakened to 77.25 yen from 77.70 yen late Monday in New York. The euro rose to $1.4240 from $1.4196.