Asian markets took a severe beating Wednesday on growing concern the U.S. economy would slump into a prolonged recession. Hong Kong's Hang Seng ended 5.4 percent lower and Japan's Nikkei index plunged over 3 percent. Even the best performing of the benchmark indexes, the Bombay Sensex, suffered a loss of 1.8 percent.
In the U.S. Tuesday, all three major stock indexes closed down more than 2 percent after a record quarterly loss for Citigroup and a fall in key December retail sales exacerbated fears of a recession. Retail sales fell unexpectedly in December to close out the the weakest year since 2002.
In early Asian trade the U.S. dollar dropped to 106.59 yen, the lowest since June 2005, before recovering some poise to trade at 106.75 yen on market talk that the Federal Reserve was holding an emergency meeting to cut interest rates immediately.
Adding to woes, results from Intelreleased after the U.S. market closed, fell short of estimates and its outlook was below forecasts, sending its shares down nearly 15 percent and boding ill for Asian tech stocks that depend heavily on U.S. demand.