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(CEP News) - Asian stock markets seem to be following Wall Street's lead in retaliation, with the Nikkei falling 10.4%, it's most since 1987. U.S. stocks plunged earlier in the North American session, with the Dow losing 7.87%, and the Nasdaq 8.37%.
The moves comes in the same week that saw Asian stocks copycat Wall Street's record gains on Monday. The Nikkei rose over 13.4% in early trade, its largest advance on record, after Wall Street's Nasdaq, S&P and Dow all rose by over 11.0%. Nevertheless, "risk aversion has returned with a vengeance," said Sue Trinh, strategist with RBC Capital Markets. "Lord only know what is influencing equities right now. On the one hand its recessionary fears, on the next its rescue package details, the next minute its talking heads having an effect," said George Androulidakis, director of foreign exchange at the National Bank of Canada. The Japanese Nikkei is down 962.36 points to 8585.109 and the Hang Seng is down 834.58 points to 15998.3. Sydney's S&P ASX 200 is down 281.90 points to 4018.1. The Australian dollar is currently up, though the recent safe haven trend has kept the currency under pressure. One Sydney strategist explained the Aussie's current movements upwards. "It's had a wee squeeze up on some Aussie cross flow going through the market," said Sue Trinh, strategist with RBC Capital Markets. She also said the slight recovery in U.S. futures have played a role, "with the S&P futures down "only" one percent," she said. "It's still lower than the euphoric highs earlier in the week," she said The Australian dollar is up 0.54 cents to 0.6671 against the USD and up 0.65 cents to 0.7950 against the Canadian dollar. The yen has climbed steadily as stocks head in the opposite direction. "The spike in risk aversion is again supporting the JPY," said Patricia Gacis, strategist with ANZ Markets. Against the yen, the U.S. dollar is down 0.12 points to 99.83 and the Canadian dollar is down 0.12 points to 83.78. The euro is down 0.20 cents to 1.3481 USD. Asia-Pacific fixed income markets are mixed, with yields on Australian 10-year bonds down 13.3 bps to 5.24 % and Japanese 10-year government bonds flat at 1.59 %. Yields on three-year Australian bonds are down 6.0 bps to 5.31 and the Australian 90-day March 09 contract is up 21.0 ticks to 95.66 . The Euroyen March 09 contract is down 0.5 ticks to 99.22 . On the economic data front, markets received the Reserve Bank of Australia's foreign exchange transactions for September today, up from A$307 million to A$407 million. Tomorrow, markets will receive Australia's third quarter import and export price indices. Japan saw no economic data releases of note today. Tomorrow, markets will receive Japanese foreign transactions, August's monthly tertiary industry index - expected to decline 0.9%, and September's department store sales figures. All data taken at 9:44 p.m. EDT By Megan Ainscow,
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