(Recasts lead, adds markets, updates prices)
By Louise Heavens
SINGAPORE, Jan 22 (Reuters) - Stocks tumbled across Asia on
Tuesday, and U.S. stock index futures sank, as panic gripped
markets that a U.S. recession could derail global economic
growth, sending investors fleeing to safe-haven government
bonds.
Share markets from Tokyo and Hong Kong to Seoul and Sydney
slumped around 5 percent, while industrial metals, such as zinc
and copper <MCU3>, plunged and oil fell well below recent
record highs.
"It's like a funeral in here," said Ken Masuda, senior
equities dealer at Shinko Securities in Tokyo. "No one knows
what's going to happen tonight in New York. It's like we've
gone blind, you don't know what's coming.
"Until we see New York, all we can do is sell," he said.
The yen hit a 2-1/2-year high against the dollar <JPY=> as
investors reduced their exposure to risky, higher-yielding
assets. The strong yen hit Japanese exporters such as Toyota
Motor Corp <7203.T> and Sony Corp <6758.T>.
"I'm sure we're in a bear market, because the mood is very
negative. People no longer believe that stocks are the road to
riches," said Cannae Capital Partners managing director Hugh
Giddy. "This may be a long slow grind down because earnings
expectations will start to fall."
MSCI's All Country World Index <.MIWD00000PUS> fell 1
percent to its lowest since November 2006 after European shares
tumbled nearly 6 percent on Monday, their biggest one-day slide
since the Sept. 11, 2001 attacks in the United States.
MSCI's Emerging Market index <.MSCIEF>, which on Monday had
its worst daily fall since August, shed 2.3 percent.
Japanese treasuries <TYv1> surged as alarmed investors
sought the relative safety of government debt. March 10-year
futures <2JGBv1> rose 0.31 point to 138.77 after earlier
touching 138.94, the highest since September 2005.
U.S. equity markets, shut on Monday for a holiday, ended
Friday with their worst weekly performance since mid-2002,
while Asian and European stocks dropped sharply on Monday, with
investors unconvinced by Washington's proposed $150 billion
fiscal stimulus package. []
U.S. stock index futures fell around 5 percent, presaging a
sharp sell-off on Wall Street later.
Billionaire investor George Soros said the world was facing
the worst financial crisis since World War Two and the United
States was threatened with recession, according to an interview
with the Austrian daily Standard.
"We really do have a serious financial crisis now," Soros
was quoted as saying. []
Japan's Nikkei <> fell 4.4 percent by the midsession,
to a two-year low. The index has shed around 17 percent this
month alone as fears deepened that the U.S. subprime mortgage
crisis will drag global financial markets lower.
South Korea's technology stocks, heavily dependent on the
U.S. export market, were mauled, pushing the Korea Composite
Stock Price Index <> down 3.8 percent to its worst level
since May. The KOSPI has lost around 14 percent so far this
year.
Hong Kong blue chips <> tumbled 5.5 percent, with U.S.
recession fears dragging bellwether bank HSBC Holdings
<0005.HK> to lows not seen since October 2003.
Hong Kong-listed shares in mainland companies <.HSCE> sank
7 percent. The Hang Seng Index <> is down about 30 percent
since a recent peak in late October and off 19 percent this
year.
A common definition of a bear market is a fall of around 20
percent over a recent period or from a recent peak,
characterised by a pessimistic outlook.
Australia's S&P/ASX 200 index <> shed 4.8 percent to
record its 12th straight session of declines. It hit a low of
5,290.5 -- its lowestintraday level since October 2006.
Mining stocks, sensitive to any economic slowdown, led the
decline. BHP Billiton <BHP.AX> fell 4.7 percent and Rio Tinto
<RIO.AX> tumbled 8.7 percent.
Oil deepened losses as global stock markets tanked.
London's Brent crude <LCOc1> fell 16 cents to $87.35 a barrel
by 0300 GMT, while U.S. crude <CLc1> traded down 2.3 percent at
$88.52 a barrel.
(Editing by Ian Geoghegan)
