NEW YORK (CNNfn) - Tokyo stocks plunged in early Wednesday trading, dropping below the 10,000 level for the first time in 17 years after terrorist attacks on the World Trade Center in New York and the Pentagon in Washington.|
Hong Kong stocks also opened sharply lower following the devastating attacks in the United States. The benchmark Hang Seng index opened 7 percent lower.
In Australia, stocks fell to their lowest level in nearly 16 months, dropping more than 4 percent in early trading.
Tokyo stocks plummet below 10,000
The Nikkei 225 average fell 6.57 percent, or 675.86 points, to 9,617.09, hovering below the 10,000 level for the first time since the week ended August 5, 1984.
The benchmark stock index has now lost 75 percent of its value since the peak of Japan's asset bubble era in December 1989. Traders said the Nikkei had more room to fall.
"The market is filled with uncertainty. Calm will not return until U.S. markets open and we can reevaluate the U.S. government's response to the attacks," said Tatsuyuki Kawasaki, director of equities at Kaneyama Securities.
The Tokyo Stock Exchange (TSE) said it reduced its price limits by half for the day due to the anticipated high level of volatility.
The capital-weighted TOPIX index lost 5.97 percent or 63.18 points to 994.94, dipping below the psychologically important support level of 1,000 for the first time since October 1998 when Japan was in the throes of a financial crisis.
Shares of Sony Corp., an electronics manufacturer that depends on the U.S. market for about 30 percent of its sales, were ask-only at ¥4,730, down 5.0 percent, or ¥250.
Prior to the start of trading, Japanese Financial Services Agency (FSA) Minister Hakuo Yanagisawa urged financial market participants to act calmly.
"The agency will take appropriate steps, keeping in close contact with the Bank of Japan and overseas monetary authorities," Yanagisawa said.
The FSA late on Tuesday set up emergency headquarters to deal with any potential fallout from the U.S. terrorism attacks.
The financial watchdog said it had decided to keep Japanese securities markets open as usual in view of the need to maintain the credibility of Japanese markets and the fact that European markets had remained open after the attack.
The New York Stock Exchange, American Stock Exchange and Nasdaq Stock Market said they have decided to stay closed at least through Wednesday.
The U.S. bond market, the Chicago Mercantile Exchange and the Chicago Board of Trade all said they would remain closed Wednesday.
In the currency market, the dollar bounced back nearly one percent to above ¥119.50 from troughs of around 118.50 late on Tuesday.
The euro also pulled back from its early peak against the dollar of 91.70 cents toward 90.80 cents. Against the yen, it was steady at around ¥109.
Hong Kong stocks open in shock
The benchmark Hang Seng index was down 7.01 percent at 9,687.38 shortly after the open, falling as much as 10.3 percent shortly afterwards.
The Stock Exchange of Hong Kong said there would be no trading in seven Nasdaq stocks with local cross-listings and the MSCI South Korea Index Fund and the MSCI Taiwan Index Fund.
Shares of Hong Kong's dominant carrier Cathay Pacific Airways fell 15.57 percent to HK$7.05 in early Wednesday trading, to their lowest level since late 1998.
Australian falls over 4% on heavy turnover
Australia's benchmark S&P/ASX 200 index fell 141 points or 4.35 percent to 3,101 at midday.
Declining stocks overwhelmed advances by five to one on heavier than normal turnover worth about A$500 million ($260 million).
Among the heaviest hit stocks, was media giant News Corp. (NWS: Research, Estimates), which sources about 70 percent of its earnings from the U.S.. Its shares were last down 9.3 percent to A$13.70, its lowest since December, 2000.
Shares of Qantas Airways, which has cancelled flights to the U.S. for the time being, was down 10 percent at A$3.09, but off an earlier low of A$2.95.
Despite announcing it was unaffected by the terror attacks, property group Lend Lease plunged 7.5 percent to A$10.18.
Australia's largest fund manager AMP, which has frozen unit pricing in all products affected by international capital markets, slumped 7.3 percent to A$17.70.
-- from staff and wire reports