Techs and banks were particularly hard hit, as Tokyo followed the lead of the Dow Jones industrial average, which posted its largest point decline ever and its biggest daily percentage slide since the 1987 stock market crash. [.N] Adding to the woes were troubles in Europe, where authorities were scrambling to prop up a slew of banks. "It's hard to imagine what's going to happen. It's kind of scary," said Masayoshi Okamoto, head of dealing at Jujiya Securities.
"In particular, European banks were putting up a front that nothing was wrong, but now they're falling one after another."
The benchmark Nikkei .N225 tumbled more than 500 points within the first half an hour of trade, touching a new year's low of 11,160.83. The broader Topix lost 5 percent, also hitting a new low for the year.
The U.S. House of Representatives on Monday unexpectedly rejected a plan to buy toxic assets from struggling banks that had been designed to revitalise strained lending markets. [ID:nN22402709]
Okamoto said moves in the foreign exchange market were likely to be key in determining where the Nikkei slide will stop.
The dollar fell to a four-month low against the yen as investors fled risky positions, hitting 103.53 yen on trading platform EBS before rising to around 104.26 yen
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