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HONG KONG - Asian shares tumbled Monday, with Japan at a four-year low, as dealers feared for the health of the global economy despite a Wall Street bailout and as the credit crisis bites deeper in Europe.
Lawmakers in Washington on Friday passed a 700-billion-dollar package for the US financial system after days of wrangling, but investors fear the plan will not be enough to prevent a world economic meltdown.
Japan's Nikkei shed 4.25 per cent to reach its lowest level since February 2004, while Taipei also hit a four-year low after sliding 4.12 per cent. Hong Kong, Shanghai and Singapore all lost more than five per cent, while Seoul slid 4.3 per cent and Sydney was off 3.3 per cent.
And in Jakarta the index was a massive 10 per cent down, its steepest single day decline in 10 years.
Investors dumped shares after US stock markets had fallen sharply on Friday, despite US congressional approval of the bank bailout.
As the US-born financial crisis took a stronger grip in Europe, the German government agreed an emergency rescue package of 50 billion euros (68 billion dollars) for Hypo Real Estate, late Sunday before markets opened in Asia.
France's BNP Paribas meanwhile announced Sunday it was taking control of the operations of ailing financial group Fortis 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.
Francis Lun, general manager at Fulbright Securities in Hong Kong, said: "Europe and US account for almost half the world's economy.
"With 50 per cent of the economy, the global economy in trouble, it is difficult for Asia to be upbeat, I think. Asia depends on exports to Europe and the US, so if the export falters, I think economic growth will falter, and so will the stock market."
In Japan, exporters were also punished as the yen soared. At one point the dollar touched 102.85 yen, its weakest since May 22.
"The market is not convinced that the US bailout package can protect the economy from the financial crisis," said Toyo Securities strategist Ryuta Otsuka in Japan.
The central bank injected another one trillion yen (9.5 billion dollars) into Tokyo's short-term money market, the 14th straight business day it has poured emergency funds into the system.
Crude oil futures meanwhile tumbled below 90 dollars a barrel as worsening financial turmoil triggered fears about slowing demand for energy.
In late afternoon, New York's main contract, light sweet crude for November delivery, hit a low of 89.96 dollars before rebounding to trade 3.43 dollars lower at 90.45.
Elsewhere Bangkok stocks tumbled 6.48 per cent, Wellington shed more than three per cent, Manila was off by 2.6 per cent and Kuala Lumpur slid almost two per cent. Indian shares plunged 5.78 per cent to close at two-year lows.
- AFP/ir
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