Stock markets plunged around Asia on Monday, as panic selling set in with traders fretting over the economic impact of the new coronavirus and digesting a free-fall in the oil price.
By mid-morning, the benchmark Nikkei 225 index had dropped 5.10% or 1,058.06 points to 19,691.69, while the broader Topix index was off 5.01% or 73.69 points to 1,397.77.
Other markets in the region were also suffering with Hong Kong stocks down 3.8 percent at the open, Australia off more than five percent and equities in New Zealand and South Korea both down by just under three percent.
In China, the benchmark Shanghai Composite Index dived 1.56 percent while the benchmark Philippine stock exchange index opened down nearly four percent.
Driving the declines was a ferocious sell-off in the oil markets sparked by top exporter Saudi Arabia slashing prices — in some cases to unprecedented levels — after a bust-up with Russia over oil production.
The two main oil contracts were both down about 20 percent in morning Asian trade, with West Texas Intermediate sliding to around $32 a barrel and Brent crude to $36 a barrel.
The foreign exchange markets were also extremely volatile, with traders snapping up the yen, seen as a hedge against global instability and selling off the dollar amid uncertainty over coronavirus in the United States.
A stronger yen tends to push down Japanese stocks, and exporters from the world’s third-top economy were especially hard-hit, with Nissan and Sony down more than five percent and Toyota down 3.60 percent.
Banks also plunged, with Sumitomo Mitsui Financial trading down nearly four percent and Mitsubishi UFJ Financial off by almost five percent.
Stephen Innes, chief market strategist at AxiCo, said the markets were suffering from a perfect storm of factors.
The dollar fetched 104.15 yen in early Tokyo time, after dipping to around 103.83 yen in Sydney time, the lowest level since November 2016. That compares with 105.40 yen in New York late Friday.
Markets were not helped by data showing that the Japanese economy had declined more than initially thought — even before the outbreak of the coronavirus.