Japan’s Nikkei slumped to a 20-month low on Tuesday after a deepening slide on Wall Street heightened investors’ aversion to risk.
The Nikkei share average was down about 5 percent at 19,147.45 just after 11 a.m. HK/SIN, declining beyond its lowest since early May 2017.
The broader Topix was also about 5 percent lower.
Meanwhile, in China, the Shanghai Index posted losses of more than 2 percent by mid-morning.
Wall Street stocks extended their steep sell-off on Monday, with the S&P 500 dropping nearly 15 percent so far this month, as investors were rattled by the U.S. Treasury secretary’s convening of a crisis group and by other political developments.
Many of the financial markets in Asia, Europe and North America are closed on Tuesday for Christmas Day.
“Negative sentiment has replaced logic, as is often the case during a sell-off. A third of the selling is induced by panic, another third by loss-cutting and the remaining third by speculators trying to make a profit from the market rout,” said Takashi Hiroki, chief strategist at Monex Securities in Tokyo.
“The sell-off is triggered almost entirely by developments in the U.S. markets, rather than by negative factors unique to the domestic market.”
Treasury Secretary Steven Mnuchin called top U.S. bankers on Sunday amid the pullback in stocks and said he was calling a meeting of financial regulators to discuss ways to ensure “normal market operations.”
Wall Street also grappled with the U.S. federal government shutdown and reports that President Donald Trump privately discussed the possibility of firing the Federal Reserve chairman.
Japanese Blue chip shares fell across the board, with Toyota Motor falling 5.1 percent, Sony shedding 4.5 percent, Nintendo down 4.3 percent and Mitsubishi UFJ Financial Group losing 4 percent.
Defensive shares such as consumer staples, healthcare and utilities were unable to withstand the selling pressure.
Convenience store operator Familymart UNY Holdings dropped 5.3 percent, healthcare product maker Kao declined 5.7 percent and Tokyo Electric Power retreated 3 percent.
All of the Tokyo Stock Exchange’s 33 subsectors were in the red, led by precision machinery and pharmaceuticals.
—CNBC contributed to this report.
