Tokyo -- Global stock markets extended their slide for a second day Tuesday, plunging amid fears that a possible US recession will cause a worldwide economic slowdown.
The dramatic declines in Asia and Europe so far this week were expected to spread to Wall Street, where stock index futures were already down sharply hours before the trading day began.
Japan's Nikkei 225 index nose-dived 5.7 percent -- its biggest percentage drop in nearly 10 years -- to 12,573.05, a day after falling 3.9 percent. Australia's benchmark index sank 7.1 percent, the market's steepest one-day slide in nearly 20 years.
Hong Kong's Hang Seng index, which slumped 5.5 percent Monday, finished down 8.7 percent. The Shanghai Composite index lost 7.2 percent to 4,559.75, its lowest close since August.
Indian Finance Minister P. Chidambaram urged investors to remain calm after trading in Mumbai was halted for an hour when the stock market there fell 10 percent within minutes of opening. The Sensex rebounded some later to finish down 4.6 percent.
"There is no reason at all to allow the worries of the Western world to overwhelm us," Chidambaram said.
European markets, which fell sharply Monday, were volatile Tuesday. By midmorning the UK's FTSE 100 had slipped 1 percent, Germany's DAX dropped 2.9 percent, while France's CAC 40 declined 1.1 percent.
Investors have dumped shares in frenetic trading the last two days on worries that the US economy, battered by a credit crisis and housing slump, will shrink in coming months, weakening demand for exports.