Asian stocks received a thrashing Monday as fears that Greece may not receive further aid and rising worries over Spain prompted a deep, region-wide selloff, with Hong Kong equities suffering the most.
In Japan, the Nikkei 225 Index sifted off 161.55 points, or 1.9%, to 8,508.32.
The Hang Seng Index in Hong Kong collapsed 587.33 points, or 3%, to 19,053.47
A German report over the weekend said that the International Monetary Fund may cut off aid to Greece.
Worries about Spain were also in focus, after the country lowered its gross domestic product estimates from this year through 2014. Reports also said Spain’s Valencia and Murcia regions may ask for Madrid’s financial assistance.
Financials delivered a big blow to markets across Asia.
In Hong Kong, index-heavyweight HSBC, one of Europe’s largest banks, tumbled 5.7%, while China Life Insurance Co. plummeted 4.8%.
Traders said a typhoon in Hong Kong had weakened retail investor participation, likely accentuating the selloff.
HSBC’s stock alone contributed to a 172-point loss for the Hang Seng Index in Hong Kong. The stock, still up 7% in the year-to-date, is a key driver behind the Hang Seng Index’s 3.4% gain thus far in 2012.
The selloff follows last week’s report by a U.S. Senate panel, highlighting the bank’s lax controls, which allegedly allowed drug traffickers, terrorists and rogue states to launder billions of dollars. Bank of America Merrill Lynch, in a note issued Friday, noted press reports suggesting HSBC could face $1 billion in fines in the U.S.
In Seoul, KB Financial Group Inc. lost 3.6%, while in Shanghai, China Merchants Bank Co. skidded 3%.
Chinatrust Financial Holding Co. gave up 2% in Taipei, while Australia & New Zealand Banking Group slid 1.1% in Sydney.
In Tokyo, Mitsubishi UFJ Financial Group Inc. dropped 2.5%, while Sumitomo Mitsui Financial Group Inc. shed 2.9%, with the Japanese lenders also under pressure from falling government bond yields and other issues.
Sectors sensitive to global growth also suffered.
Sharp Corp. lost 5.2% in Tokyo, BHP Billiton Ltd. fell 2.6% and Fortescue Metals Group Ltd. sank 7.1% in Sydney.
In Taipei, Taiwan Semiconductor Manufacturing Co. gave up 3.1%, also dragged by a warning its revenue could dip in the fourth quarter.
Japanese steel makers also took a hit after a Nikkei news report that the sector’s two top players — JFE Holdings Inc. and Nippon Steel Corp. — would report sharply reduced profit for the most recent quarter.
Shares of JFE dropped 3.1%, while Nippon Steel retreated 2%.
Among other notable movers, China Merchants Holdings International Co. dropped 5.9% in Hong Kong after the ports operator issued a profit warning.
In other markets
Shanghai’s CSI 300 index erased 33.02 points, or 1.4%, to 2,365.43
Korea’s Kospi Index lost 33.49 points, or 1.8%, to 1,789.44
Singapore's Straits Times Index fell 33.04 points, or 1.1%, to 2,982.49
Taiwan’s Taiex Index docked 135.95 points, or 1.9%, to 7,028.73
New Zealand’s NZX index defied the trend and actually gained 1.66 points to 3,465.36
Australia’s ASX Index tumbled 70.18 points, or 1.7%, to 4,128.94
