Stock markets in Asia have dropped sharply during trading on Monday amid fears the US economy may be heading for a recession.

Japan’s Nikkei 225 share index fell by as much as 10% at one point, while the market’s broader TOPIX index also fell 8%.

South Korea’s KOSPI index also dropped more than 8% on Monday, while India’s Nifty 50 fell more than 2%.

It comes after US jobs market data on Friday came in much lower than expected for July. Some 114,000 jobs were created during the month – significantly lower than the 175,000 jobs forecast by Wall Street.

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The figure was the weakest since December last year and the second weakest since the start of the COVID pandemic in the West in March 2020.

Robert Carnell, from financial services firm ING, said: “What we are looking at now is a situation where the market is viewing what’s going on in the US macro economy as ticking the recession box.”

Concerns globally have also been heightened by worries over the strength of China’s economy and several weak earnings reports from major technology firms last week, as investors grow jittery over potential returns from investment in AI.

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