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TOKYO: Asian stock markets suffered another mauling on Monday as doubts grew about whether a Wall Street bailout package will stem the global financial crisis, dealers said.
Investors were spooked by signs of escalating problems among European banks, after Germany's fourth biggest bank had to be rescued over the weekend.
Taiwanese stocks dropped 4.12 per cent to a more than four-year closing low, with financial shares including Cathay Financial leading the decline. The main TAIEX share index closed down 236.53 points at 5,505.70, its lowest close since August 2004.
South Korean shares closed 4.3 per cent in the red, with its KOSPI index down 60.90 points at 1,358.75, while Australia's S&P/ASX 200 dropped 3.3%, or 155.00 points to 4540.40.
By midday trading, Thailand's SET was down 3.42 per cent at 569.88, India's Sensitive slidded 3.62 per cent to 12072.49, Indonesia's JSX Comp dived 5.45 per cent to 1732.66, Malaysia's Composite edged down 0.83 per cent to 1008.22 and Singapore's STI tumbled 3.55 per cent to 2215.56.
Chinese share prices were down 3.52 per cent by midday, with the benchmark Shanghai Composite Index, which covers A and B shares, 80.70 points lower at 2,213.08.
Japanese shares sank 4.25 per cent to a four-year closing low, after nearly falling five per cent at one point as financials, exporters and high-tech shares were hit hard.
The Tokyo Stock Exchange's benchmark Nikkei-225 index dropped 465.05 points
to end at 10,473.09, the lowest closing level since February 2004. The broader Topix index of all first section shares slid 48.92 points, or 4.67 per cent, to end at 999.05, slipping below the key 1,000-points level for the first time since December 2003.
In an effort to keep credit flowing, Japan's central bank pumped emergency funds into the short-term money market for a 14th straight business day, pouring in 1.0 trillion yen (US$9.5 billion) in the morning.
Investors dumped shares after US stock markets fell sharply Friday, despite US congressional approval of a US$700-billion bank bailout.
Dealers said the declines reflected worries that the plan would not be a panacea for the broad economic and banking woes in the United States.
"In retrospect, the passage of the bill will be seen as the easy part of the process, as the rescue bill won't prevent a US economic slowdown/recession," warned analysts at RBC Capital Markets.
Underscoring the worsening conditions in the world's largest economy, 159,000 US jobs were lost in September, according to government figures.
Investors were bracing for another weak session on Wall Street when trading resumes there, said Toshihiko Matsuno, deputy equity general manager at SMBC Friend Securities.
"Those shares that had been bought up, and the sectors that are directly affected by the current financial situation, are being sold again," he said.
As the US-born financial crisis takes a stronger grip in Europe, BNP Paribas announced Sunday that it was taking control of ailing financial group Fortis's operations in Belgium and Luxembourg.
The leaders of France, Germany, Italy and Britain vowed over the weekend to protect fragile banks but did not discuss a European financial rescue package.
Given the various economic conditions in each of the eurozone member countries, "it looks difficult for authorities to take dramatic and quick action like the US," Barclays Capital analysts wrote in a note to clients.
Markets were looking ahead to a meeting Friday of finance chiefs from the Group of Seven rich nations, waiting for any announcements on coordinated action such as liquidity injections or interest rate cuts, dealers said.
"Panics can stop as quickly as they start if something occurs to change dramatically people's expectations. Coordinated financial policy easing seems to us the most likely candidate for that," ING analysts told clients.
A speech Tuesday by US Federal Reserve Chairman Ben Bernanke will also be closely watched for any clues on the possibility of a US interest rate cut.
On the foreign exchange market, the euro fell to a 13-month low against the dollar, hit by the signs of escalating financial turmoil in Europe, dealers said.
The single European currency dropped to as low as 1.3610 dollars in early Asian trade, down from 1.3781 in New York late Friday. The dollar fell to 104.42 yen from 105.27.
- AFP/yb
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