Japanese stocks plunge, SET slips after Wall Street losses

A man walks past an electronic stock board at a securities firm in Tokyo on Monday. (AP photo)

BEIJING: Japanese stocks plunged Tuesday and other Asian markets, including Thailand, declined following heavy Wall Street losses triggered by President Donald Trump's attack on the US central bank.

The Nikkei 225 fell by an unusually wide margin of 5.1% to 19,147.45 points. The Shanghai Composite Index lost 2.1% to 2,473.75. Benchmarks in Thailand and Taiwan also declined.

Markets in Hong Kong, Australia and South Korea were closed for Christmas.

Wall Street indexes fell more than 2% on Monday after Trump said on Twitter the Federal Reserve was the US economy's “only problem”. Efforts by Treasury Secretary Steven Mnuchin to calm investor fears only seemed to make matters worse.

US stocks are track for their worst December since 1931 during the Great Depression.

The market has been roiled by concerns about a slowing global economy, the trade dispute with China and another interest rate increase by the Fed.

Trump's Monday morning tweet heightened fears about the economy being destabilised by a president who wants control over the Fed. Its board members are nominated by the president, but they make decisions independently of the White House. The board's chairman, Jerome Powell, was nominated by Trump last year.

“The only problem our economy has is the Fed,” the president said on Twitter. “They don't have a feel for the Market, they don't understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can't score because he has no touch -- he can't putt!”

The Standard & Poor's 500 index slid 2.7% to 2,351.10. The benchmark index is now down 19.8% from its peak on Sept 20, close to the 20% drop that would officially mean the end of the longest bull market for stocks in modern history -- a run of nearly 10 years.

The Dow Jones Industrial Average sank 2.9% to 21,792.20. The Nasdaq skidded 2.2% to 6,192.92.

On Sunday, Mnuchin made a round of calls to the heads of the six largest US banks, but the move only raised new concerns about the economy.

Most economists expect US economic growth to slow in 2019, not slide into a full-blown recession. But the president has voiced his anger over the Fed's decision to raise its key short-term rate four times in 2018. That is intended to prevent the economy from overheating.

Technology stocks, health care companies and banks took some of the heaviest losses in Monday's sell-off. Wells Fargo slid 3.4%, Microsoft 4.2% and Johnson & Johnson 4.1%.

US markets reopen Wednesday.