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Bucking the trend was Moscow, where the leading stock markets closed around 10 percent higher, rebounding from the previous day's sharp losses amid global financial turmoil.
Tokyo dived more than 11 percent as investors took fright at news that Yamato Life Insurance will file for bankruptcy protection, becoming the first Japanese insurer to go bust amid the global credit crisis.
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The bloodbath quickly spread to other markets.
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Sydney plunged 6.5 percent, Singapore lost more than seven percent, Seoul was down 7.
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5 percent and Shanghai opened 3.8 percent lower. Hong Kong followed, opening down 7.
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"It's beyond panic," Oh Hyun-Seok at Samsung Securities told Dow Jones Newswires.
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"Concerns about the global economy are deepening further and there is no signs of easing in the global credit crunch.
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The Bank of Japan pumped 3.5 trillion yen (35.5 billion dollars) into the money markets amid the turmoil in Tokyo, while the stock exchange briefly halted some trading in futures and op