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SINGAPORE: Asian stocks were weaker again early Tuesday as investors took their lead from the gyrations in US equities and dumped bank shares amid worries that the financial sector will be hit by further credit losses.
Analysts say broad caution should persist before the minutes of the most recent Federal Open Market Committee meeting are released later in the day.
US government-chartered housing-loan agency Freddie Mac is set to release its third-quarter earnings later as well, and investors will be watching for details on how the mortgage and mortgage-backed securities market have affected the company.
Also, there is this week's US Thanksgiving Day holiday to keep investors on their toes.
With conditions in money markets again tightening and players bracing for more bad news on the credit front, regional stocks were taking their lead from the 218.35 point (1.7%) fall in the Dow Jones Industrial Average overnight.
US stocks tumbled after Goldman Sachs downgraded Citigroup shares to "sell" from "neutral," saying the giant bank faces some US$15 million in write-downs on its mortgage-related exposure in the coming two quarters and may have to cut its dividend to shore up its capital ratios. Goldman also cut its target prices for other financials. As a result, Merrill Lynch dropped 4% and Bear Stearns 5.1%.
Hong Kong's Hang Seng Index was down 876.53 or 3.2% at 26,583.64 some 20 minutes after opening.
In Singapore, the key Straits Times Index (STI) fell 76.49 points to 3,335.23 within half an hour of trade before picking up slightly. The STI was down 68.09 points at 3,343.63 in late morning trade.
Bank shares were hit, with DBS dropping 1.5% to S$19.10 while United Overseas Bank lost 1.6% to S$18.90 and Oversea-Chinese Banking Corp shed 1.2% to S$8.30.
Shares of Singapore Telecommunications (SingTel) fell 2.7% to S$3.58 after an Indonesian watchdog ruled that the Singapore company's stake in mobile phone firm Telkomsel violates anti-monopoly laws.
SingTel said on Tuesday that it plans to take necessary legal action to protect its interest in Indonesia. SingTel has a 35 percent stake in PT Telekomunikasi Selular (Telkomsel), Indonesia's biggest mobile phone firm, through its wholly-owned unit SingTel Mobile.
Indonesia on Monday ordered Singapore's investment holding company Temasek Holdings to sell its stake in one of two major Indonesian mobile phone firms within two years. The watchdog also fined Temasek and various Temasek units, including SingTel Mobile, for a breach of competition law.
In Australia, the S&P/ASX 200 fell 2% in early trade to 6404.30 while New Zealand's NZX-50 index was 1.6% lower at 4,049.86. Japan's Nikkei 225 was down 1.2% at 14,868.98 while in South Korea the Kospi was off 2.3% to 1,850.67. - CNA/ir
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