Concerns about rot in American corporate governance continued to wreak havoc in world markets Wednesday, sending Tokyo's stock exchange plunging to a five-month low and stock indexes across Europe plummeting at the opening bell.
A slew of accounting scandals in the United States has sent the Dow Jones Industrial Average into a nine-week tailspin — and other major financial centers are taking New York's lead.
Tokyo's benchmark 225-issue Nikkei Stock Average fell 2.62 percent Wednesday to 9,947.72, its lowest close since Feb. 20, the last time it finished under the psychologically important 10,000 mark.
The Nikkei had been surprisingly resilient in recent sessions amid hefty losses on Wall Street, but the Dow's fourth straight decline Tuesday — a 1.06 percent fall to 7,702.34 — spooked Tokyo investors.
Also weighing on the Tokyo market was uncertainty ahead of expected earnings announcements by high-tech companies Thursday for the April-June quarter. Sony, which is rumored to be struggling with its own accounting problems, is among the companies that will be reporting.
On Monday, the Dow fell to its lowest close since October 1998 and the tech-heavy Nasdaq Composite Index plunged to its lowest since May 1997. On Tuesday, the Nasdaq fell 53.60 points, or 4.18 percent, to finish at 1,229.05.
Other Asian bourses closed lower Wednesday.
Hong Kong's benchmark stock index tumbled to a nine-month low, closing below the 10,000-mark for the first time since October last year. The Hang Seng plunged 341.90 points, or 3.3 percent, to finish at 9,971.99. On Tuesday, the index rose 203.64 points, or 2.01 percent.
The Taiwan Stock Exchange's benchmark index fell 119.75 points, or 2.3 percent, to 5,039.48.
"It looks like we are still far from the end of the woes," said Janet Sheng, an analyst at KG Securities in Taipei.
The rout was spilling over to Europe, as markets immediately plunged at the opening bell.
In London, the Financial Times-Stock Exchange 100-Share Index , was down 166.10 points, or 4.31 percent, to 3,691.90 in morning trading.
Frankfurt's Xetra DAX dropped 4.40 percent, or 154.57 points, to 3,361.26; the CAC40 in Paris was down 36.16 points, or 3.83 percent, to 2,952.49.
Dutch blue chip stocks tumbled in morning trading Wednesday as financial shares dragged down the AEX benchmark index more than 6 percent.
The decline in Amsterdam was even sharper than drops elsewhere in Europe, as the main Dutch bourse had to contend with concerns about a shaky financial sector as well as Wall Street's blues.
Insurer Aegon, which issued a profit warning Monday, led the decliners with a fall of 9 percent, trailed by banking and insurance group ING, which slumped 8.3 percent.