Asian shares plunge after Wall Street's worst day since Black Monday crash of 1987

The combined health crisis and retreat on Wall Street have heightened fears of a global recession

Pedestrians wearing face masks, as a precautionary measure against the COVID-19 coronavirus, walk past a stock market display board showing movements of the Hang Seng Index in Hong Kong on March 13, 2020. Hong Kong shares plunged again in the morning session March 13 as world markets were sent into meltdown by fears over the coronavirus outbreak that has threatened to plunge the global economy into recession.
 / AFP / Anthony WALLACE
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Shares plunged in Asia on Friday, with benchmarks in Japan, Thailand and India sinking as much as 10 per cent after Wall Street suffered its biggest drop since the Black Monday crash of 1987.

Markets worldwide have retreated as fears of economic fallout from coronavirus crisis deepen and the meltdown in the US, the world's biggest economy, batters confidence around the globe.

Trading was halted temporarily in Bangkok and in Mumbai after the main benchmarks in both markets hit the 10 per cent downside limit. After trading resumed, the Stock Exchange of Thailand was down 8.7 per cent and the Sensex in Mumbai had fallen 9.4 per cent.

In China, where communities are recovering from the worst of the virus, the Shanghai Composite index was down 3 per cent. Most other regional markets had lost between 4 per cent to 6 per cent on Friday.

“Between the lack of a strong US fiscal response and the latest travel ban for arrivals from Europe to the US, global markets appear to have been tipped over into a sell-everything mode," Jingyi Pan of online trading provider IG said in a commentary.

European markets fell 12 per cent in one of their worst days ever, even after the European Central Bank pledged to buy more bonds and offer more help for the economy.

Overriding concerns about the actual impact on business and trade is pessimism over how the crisis is being handled, with the “sum of all fears are culminating with the view that policy-makers remain well behind the curve," said Stephen Innes of AxiCorp, a foreign exchange company.

Not all markets have suffered equally, but many are down by double-digits from just weeks earlier. The Stock Exchange of Thailand has lost nearly 40 per cent and the Philippines' benchmark is down more than 30 per cent.

Tokyo's Nikkei was down 7.8 per cent, while the Kospi in South Korea sank 7.2 per cent. In Hong Kong, the Hang Seng lost 5.8 per cent.

The rout has come amid cascading flight cancellations and shutdowns across the globe — including the US President Donald Trump's suspension of most travel to the US from Europe — and rising worries that the White House and other authorities around the world can’t or won’t counter the economic damage from the outbreak any time soon.

“We are starting to get a sense of how dire the impact on the economy is going to be. Each day the news doesn't get better, it gets worse,” said Liz Ann Sonders, chief investment strategist at Charles Schwab, an American bank and stock brokerage firm.

Stocks fell so fast on Wall Street at the opening bell, on Thursday, that they triggered an automatic, 15-minute trading halt for the second time this week. The so-called circuit breakers were first adopted after the 1987 crash.

The coronavirus has infected around 128,000 people worldwide and killed over 4,700. The death toll in the US climbed to 39, with over 1,300 infections.

For most people, the virus causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illnesses, including pneumonia. The vast majority of people recover from the virus in a matter of weeks.

The combined health crisis and retreat on Wall Street have heightened fears of a global recession.