 "A man looks at an electronic board showing Japan's Nikkei average and related indices at the Tokyo Stock Exchange (TSE) in Tokyo")
Japan's Nikkei share average tumbled 4% on Thursday morning after Wall Street languished on worries about weak oil prices and a slowdown in the global economy, battering global cyclical stocks such as exporters.
The Nikkei stumbled 3.7% to 17,063.21 in mid-morning trade after hitting as low as 17,004.12, the lowest since late September. If the benchmark index falls below 16,901.49, an intraday low marked on September 29, it will be the lowest in more than a year.
“I wouldn't be surprised if it falls further and below the 17,000-line,” said Hiroaki Mino, director of investment information department at Mizuho Securities, adding that sentiment could deteriorate even further if worries about the global economy accelerate.
On Wednesday, two top Federal Reserve officials expressed concerns about slowing Chinese growth. Boston Fed President Eric Rosengren said global and US economic growth may be slipping and could force the Fed into a more gradual course of rate hikes than officials currently expect.
“Investors are increasingly worried that the (US) market is not strong enough to withstand an initial view that the Fed would hike rates four times this year," said Masashi Oda, senior investment officer at Sumitomo Mitsui Trust Bank.
All of the Topix's 33 subsectors were in negative territory, with oil stocks, mining companies and exporters underperforming.
Inpex Corp dived 5.1%, Sumitomo Metal Mining shed 4.1%, Honda Motor Co fell 4.5%, Murata Manufacturing dropped 6.4% and Fanuc Corp stumbled 4.9%.
Sumitomo Corp nosedived 8.7% after saying it would take a write-down of 77 billion yen on its Madagascar nickel project for the Oct-Dec quarter and withdrew its earnings forecast for the year through March 2016.
Japan's machinery data, which was released early in the morning, did not help sentiment at all. Core machinery orders fell 14.4% in November from the previous month, down for the first time in three months and marking a bigger decline than economists' median estimate for a 7.9% drop.
The broader Topix dropped 3.4% to 1,392.57 and the JPX-Nikkei Index 400 fell 3.5% to 12,533.67.
