The benchmark index lost 12 per cent last week, hit by massive selling of export-linked shares, and there was more bad news in Japan on Monday as leading car manufacturer Toyota Motor Corp said its global sales in the July-September quarter fell for the first time in seven years – down four per cent from last year – due to faltering demand in the US.
Shares of camera-maker Canon and other exporters were down as the yen rose against the dollar, and large banks were hammered on concerns that they may need to raise billions of dollars each to offset hefty losses on their stock portfolios.
Stock across the rest of Asia were also lower, with Hong Kong’s Hang Seng index down more than four per cent and India and China each losing more than three per cent.
Australia’s S&P/ASX 200 index fell by around two per cent from Friday’s four-year closing low before paring some of those losses, while a spokesman said the country’s central bank was buying Australian dollars to provide the market with certainty and liquidity amid a plunge in the currency’s value.
In the Philippines, trading was suspended after a 10 per cent slump in its market.
In South Korea, share prices fluctuated in early trade as the central bank cut a key interest rate by a greater-than-expected 75 basis points in an emergency meeting on Monday.
The Korea Composite Stock Price Index (Kospi) opened about one per cent lower then rose by more than two per cent after news of the rate cut from five per cent to 4.25 per cent emerged.
But by the afternoon, share prices had again retreated and were down about three per cent.
The five per cent interest rate had been set just this month when Seoul joined central banks worldwide in concerted rate cuts.
But the Kospi has continued to slide and had its worst week on record last week, falling by about 20 per cent as world markets continued to sink amid fears financial turmoil will lead to a global recession.
Discussing that turmoil and the corporate strategy to counter it, senior corporate executives from around the world were to meet at the Nikkei Global Management Forum in Tokyo on Monday.
Meetings were also to be held in the Brazilian capital, Brasilia, where representatives from Brazil, Argentina, Paraguay, Uruguay, Chile and Bolivia were gathering, and in Helsinki, where finance ministers from Denmark, Finland, Iceland, Norway, and the Baltic states were to discuss the financial crisis.