Asian financial stocks took a further beating on Tuesday, sending most regional indexes down by at least 2%, on fears about the well-being of the U.S. banking and housing markets.
In Tokyo, the benchmark Nikkei 225 Average lost 2% to 12,754.56 while the blue-chip Hang Seng Index plunged almost 840 points to 21,174.77.
Japanese traders were rattled by a local business newspaper report that the country's top three banks hold a combined 4.7 trillion yen (US$44 billion) in Fannie Mae and Freddie Mac debt.
In Japan, banks and insurance issues got slammed.
Mitsubishi UFJ Financial Group plunged 5.32 percent, Mizuho Financial Group was down more than 5 percent, and Sumitomo Mitsui Financial Group plunged 6.11 percent. Earlier in the day, the Bank of Japan kept interest rates on hold, deciding to take a wait-and-see approach amid the current volatility.
In China, rumors were circulating that the Chinese government had also invested in Fannie and Freddie bonds.
The benchmark Shanghai Composite Index fell 3.4 percent to close at 2779.45.
Elsewhere:
South Korea's benchmark slid 3.2 percent.
Taiwan's Taiex index slumped 4.5% to 6,834.24 to finish at its lowest level in more than a year.
New Zealand's NZX 50 index slipped 1.3%.
Australia's main index lost 2.1 percent.
with files from other wire services
