Asian markets extended their rout and the dollar hit 15-month lows against the yen Thursday after Federal Reserve boss Janet Yellen raised concerns about the global economy, essentially quashing the chances of another US rate hike any time soon.
Hong Kong led a broad sell-off across the region, while an ongoing supply glut and production splurge saw oil prices sink below $27 a barrel.
And, highlighting the impact the slump in commodities is having, Australian mining giant Rio Tinto reported an annual net loss of $866 million.
Dealers continued their flight to safe investments that has played out across trading floors from Asia to the Americas this week as they fret about a possible global recession.
Hong Kong stocks -- closed from Monday to Wednesday for the Chinese New Year break -- slumped almost four percent to their lowest levels since June 2012. It had already lost 12 percent by the end of trade Friday.
On the first trading day of the Year of the Monkey, selling was also stoked by concerns about riots in the city this week that saw police battle street sellers, injuring several people.
Analysts said the clashes could harm tourism.
"You can’t avoid a drop because everywhere has come down so much during this time and the same concerns are still there - oil price, global recession," Steven Leung, an executive director for institutional sales at UOB Kay Hian, told Bloomberg News.
"The image of Hong Kong as a metropolitan city has been hurt quite seriously" by the riots, he said.
There were also sharp losses on most other regional markets, with Seoul closing almost three percent down and Singapore off 0.8 percent, while Wellington also sank. However, Sydney rebounded on bargain-buying, ending one percent up.
Tokyo, Shanghai and Taipei were closed for public holidays.
In early European trade London shed 1.2 percent, Frankfurt lost 1.4 percent and Paris shed 1.8 percent.
- Dollar extends losses -
The dollar sank against the yen to levels not seen since November 2014 after Yellen's testimony to Congress.
While she made no explicit comments on the Fed's plans to lift rates -- after December's rise -- her description of clouds looming over the US economy was taken as a hint there will be no increase in the immediate future.
Soon after she spoke the dollar fell to 113.40 yen from 115.14 yen the day before.
On Thursday it fell further, to briefly touch 112.44 yen -- its weakest rate since November 2014 after the Bank of Japan's surprise decision to ramp up its vast bond-buying scheme.
The dollar also sank against most emerging market currencies, with the Australian dollar, South Korean won, Indonesian rupiah and Malaysian ringgit all enjoying healthy gains.
"Janet Yellen had a delicate task last night -- to sound concerned enough to reassure investors that the Fed was feeling their pain, while still sounding upbeat enough to bolster the notion that this volatility will all blow over," Sharon Zollner, a senior economist in Auckland at ANZ Bank New Zealand Ltd., said in a client note.
"The Fed has no idea how this is going to pan out either, so all Yellen could really do was ensure she wasn't the catalyst for the lurch."
Energy firms again felt the heat as oil prices continued to head south owing to the supply glut, overproduction and the prospect that demand is unlikely to pick up any time soon.
US benchmark West Texas Intermediate was 1.8 percent down, below $27, while Brent shed one percent to fall below $31. That came a day after WTI sank 1.8 percent and Brent lost 1.7 percent.
In Sydney after the market closed Rio unveiled its huge net loss in what the mining giant said was a "highly challenging environment" as commodity prices plunged and the Chinese slowdown hit hard. It made a $6.53 billion net profit in the previous reporting year.
- Key figures around 0830 GMT -
Hong Kong - Hang Seng: DOWN 3.9 percent at 18,545.80 (close)
Seoul - KOSPI: DOWN 2.9 percent at 1,861.54 (close)
Sydney - S&P/ASX 200: UP 1.0 percent at 4,821.10 (close)
Tokyo - Nikkei 225: Closed for a public holiday
London - FTSE 100: DOWN 1.2 percent at 5,606.3
Dollar/yen: DOWN at 112.44 yen from 113.40 yen
Euro/dollar: UP at $1.1300 from $1.1286 on Wednesday
New York - low: DOWN 0.6 percent at 15,914.74 (close)