Tokyo: Stocks across Asia tumbled to their lowest in months on Thursday in the wake of declines on Wall Street and amid anxiety that possible US interest rates hikes will slow US and global growth.
Japan's benchmark Nikkei 225 index tumbled 3.07 per cent its lowest in six months, while India's benchmark index slid 3.2 per cent in early trading.
South Korean shares plunged to their lowest level in seven months after the Bank of Korea raised interest rates for the fourth time since October. Seoul's key stock index declined 3.5 per cent.
Growing speculation that the US Federal Reserve will raise interest rates at its meeting later this month has triggered worries about a slowdown in the US economy, which could undermine demand for Asian exports.
"Continued selling is based on worries among investors that the Fed may raise US interest rates further to rein in inflationary pressures, even if allowing for an economic slowdown," said Takashi Ushio, a strategist at Marusan Securities Co.
"Until uncertainties about the US interest rate policy and the outlook over the American economy will be erased to some extent, the Tokyo market's direction will remain unstable," he added.
Taiwan's benchmark stock index plunged 4.2 percent to its lowest level in nearly six months. Traders blamed the decline on falling stocks in other regional markets, and on political uncertainty over an opposition campaign to oust President Chen Shui-bian over alleged insider trading by his relatives.
The losses came after stocks dropped on Wall Street Wednesday, extending investors' losses for a third straight session and pushing the Dow Jones industrial average below 11,000 for the first time since March 9.
The Dow has lost more than 316 points this week; the selloff has also wiped out the Nasdaq composite index's gains for the year and put the Standard & Poor's 500 index less than 8 points away from its December 31 close.
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