Trading floors were overcome by a wave of selling as investors fled to the hills, with Hong Kong’s loss of 13 percent its worst in nearly three decades, while Frankfurt dived 10 percent, Taipei 9.7 percent and Tokyo almost eight percent.
The benchmark Hang Seng Index lost 3,139.55 points to end 13.74 percent down at 19,710.26.
The 13 percent loss marked its worst day since October 1997 during the Asian financial crisis.
On Sunday, vice commerce minister Ling Ji told representatives of US firms its tariffs “firmly protect the legitimate rights and interests of enterprises, including American companies”.
Hopes that US President Donald Trump would rethink his policy in light of the turmoil were dashed when he said he would not make a deal with other countries unless trade deficits were solved.
“Sometimes you have to take medicine to fix something,” he said of the ructions that have wiped trillions of dollars off company valuations.
The savage selling in Asia was across the board, with no sector unharmed – tech firms, carmakers, banks, casinos and energy firms all felt the pain as investors abandoned riskier assets.
Among the biggest losers, Chinese ecommerce titans Alibaba tanked more than 17 percent and rival JD.com shed 14 percent, while Japanese tech investment giant SoftBank dived more than 11 percent and Sony gave up nine percent.
Shanghai shed more than seven percent, with China’s state-backed fund Central Huijin Investment vowing to help ensure “stable operations” of the market.
Singapore plunged nearly eight percent, while Seoul gave up more than five percent, triggering a so-called sidecar mechanism – for the first time in eight months – that briefly halted some trading.
Sydney, Wellington, Manila and Mumbai were also deep in the red, while London and Paris both dropped more than six percent at the open.
“We could see a recession happen very quickly in the US, and it could last through the year or so, it could be rather lengthy,” said Steve Cochrane, chief Asia-Pacific economist at Moody’s Analytics.
“If there’s a recession in the US, of course, China will feel it as well because demand for its goods will be hit even harder,” he added.
Australian Treasurer Jim Chalmers said spiralling trade tensions had “crushed confidence in markets”.
“When confidence craters, markets crash and that’s what we’ve seen as a result of the US administration’s self-defeating tariffs policy,” Chalmers said.
European stock markets plummeted at the start of trading on Monday, with Frankfurt slumping up to 10 percent.
Indices were in freefall, with Paris diving more than six percent, London sliding nearly six percent, Amsterdam and Oslo seeing losses of more than five percent and Milan down over three percent.
US futures also signaled further weakness.
The future for the S&P 500 lost 3.7 percent while that for the Dow Jones Industrial Average shed 2.9 percent.
The future for the Nasdaq lost 4.7 percent. (Agencies)
