KEY POINTS:
After the excitement of a US election global markets came back to earth with a thump yesterday.
The US may have a new President but the credit crunch is far from over.
New Zealand's NZX-50 got off relatively lightly, falling just 1.59 per cent, while Asian markets fell sharply and the ASX-200 shed 4.31 per cent.
Japan's Nikkei index fell 6.5 per cent to 8899. Hong Kong's Hang Seng Index was down 6.6 per cent in afternoon trading.
South Korea's benchmark Kospi index broke a five-session winning streak to dive 7 per cent. Markets in Singapore and mainland China also fell.
In Australia, shares in Rupert Murdoch's News Corp plunged 21 per cent after downgrading its full year outlook.
ABC Learning Centres, the world's largest childcare operator, tumbled 12 per cent to A54c, as the company called in the receivers.
The pullback was in line with weakness on Wall St, where investor optimism surrounding the election of Democrat Barack Obama as President quickly evaporated in the face of gloomy economic news.
The US service sector, the largest component of America's gross domestic product, contracted sharply in October as new orders and employment fell.
Throughout Asia a series of profit warnings from major companies such as carrier Cathay Pacific Airways and Japan's Isuzu Motors yanked the markets back to the reality of deteriorating economic conditions.
After seeing some strong gains in recent days, many investors moved to take profits.
"We had one week of a rebound and then we're coming back to reality," said Francis Lun, general manager of Fulbright Securities in Hong Kong. "Despite the euphoria over the election, the world's economy hasn't changed."
Australian shares in News Corp plunged 21 per cent to A$12.50, the most since December 1990. The media company said fiscal 2009 profit would drop by the "low to mid teens" in percentage terms, compared with a previous forecast for a gain.
Cathay, Hong Kong's biggest carrier, dropped 11 per cent to HK$8.37. This year's earnings would be hurt by weakening revenue and losses on fuel-hedging contracts, which more than quadrupled from the end of September after jet-fuel prices slumped, the company said.
Isuzu tumbled 13 per cent to 176. The company said yesterday that annual profit would decline, compared with its previous guidance for an increase.
Sales were slowing in Thailand, its biggest overseas market, and a stronger yen was reducing the value of overseas earnings, Isuzu said.
Commodities producers fell after prices for oil and metals declined. BHP Billiton, the world's biggest mining company and Australia's largest oil producer, slid 7.59 per cent, to A$29.20.
Oil for December delivery fell 7.4 per cent to US$65.30 a barrel in New York yesterday, the biggest drop since October 10.
In New York Wednesday, volatility swept over the US market again, with the Dow Jones industrial average falling 486.01, or 5.1 per cent, to 9139.27. The S&P 500 index and the Nasdaq composite also shed more than 5 per cent each.
Last night US futures were down, suggesting Wall St would sink further in Thursday trading.
- AGENCIES
