Japan leads Asian shares' plunge , Indian Markets to see huge losses

Japan's benchmark Nikkei has fallen by 5.52% in morning trading, and at one point was 7.59% down on the day.

South Korea's Composite Stock Price Index opened down nearly 6%, and Hong Kong lost 4.7%.

The falls came as new figures showed Japan's trade surplus plunged 94% in the last year due to weak exports and soaring energy import costs.

Meanwhile, the White House has said a global summit to tackle the financial crisis will be held next month.

The meeting will debate the reforms needed to avoid another financial crisis and look at the progress currently being made.

Leaders from the G20 group of nations - the world's leading industrialised countries and major developing nations - will attend.

'Risk factor'

In Tokyo, the Nikkei fell sharply as soon as the markets opened, and at one point was trading at 8,016.61, its lowest level for more than five years.

The plunge came in the wake of Wednesday's trading on Wall Street, which lost 5.69%.

"Rapid fluctuations in the stock and currency markets are risk factors to the economy," said Jun Matsumoto, a deputy chief cabinet secretary, at a Tokyo press conference.

In Seoul, the Korean won lost 5% of its value against the dollar.

'Rapid deterioration'

Job cuts at Yahoo and drugs firm Merck have increased economic concerns in the United States.

Investor sentiment was also hit by warnings from both UK Prime Minister Gordon Brown and Bank of England Governor Mervyn King that Britain was most likely now entering its first recession in 16 years.

Stocks were also dragged down by commodity stocks tracking weaker oil and copper prices.

Crude prices were down to 16-month lows on signs of falling demand. US light crude was down $5.52 to $66.66, its lowest point since June 2007.

Brent was down $5.02 to $64.70. Opec is now expected to cut production when it meets on Friday to try to shore up prices.

Widespread sell-off

Wall Street's main Dow Jones index ended down 5.7% or 514 points to 8,519 on Wednesday, while in Europe, the UK's FTSE 100 lost 4.5%, and Germany's Dax fell 4.5%.

"It appears that investors are rethinking their assumptions about the depth and duration of the recession," said Fred Dickson, chief market strategist at DA Davidson.

"They are recognising that the credit crisis has taken an annoying economic slowdown into something far more serious."

Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, said attention had turned from a banking crisis - which was now considered to have been largely averted - to the possibility of recession.

"The question is, how long and deep will it be?"

He said UK GDP figures, due to be released on Friday, were likely to be in negative territory and the market was "steeling itself".

Earlier in the day, stocks tumbled to 5 year lows at wall street as investors grappled with an increasingly dire outlook for the global economy following a raft of disappointing profits and outlooks from major U.S. companies.

Plummeting commodities prices sent energy and materials company shares sharply lower. Exxon Mobil was the top drag on the Dow, down almost 10 percent.

Boeing Co's shares fell 7.5 percent after the aircraft maker reported a steep drop in quarterly profit and warned it might need to provide financing to some of its customers in 2009.

AT&T's shares fell 7.6 percent after the top U.S. phone carrier posted a quarterly profit below Wall Street's forecasts as it grappled with pressure on wireless margins.

A plunge in emerging market assets and widespread deleveraging were seen as further signs the credit crisis that has plagued the United States and Europe has begun to hit developing countries. Stock markets around the world have fallen sharply over the last two days.

"The themes remain the same: concerns about global recession, deflation and concerns about significantly reduced worldwide demand," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.

The Dow Jones industrial average fell 514.45 points, or 5.69 percent, to 8,519.21. The Standard & Poor's 500 Index dropped 58.27 points, or 6.10 percent, to 896.78, its lowest level since April 2003.

The Nasdaq Composite Index was down 80.93 points, or 4.77 percent, at 1,615.75, closing at it lowest level since June 2003.