Asian stock markets slumped Friday with some suffering their worst losses in months amid concerns about the potential fallout from Dubai World's debt standstill, with bank and construction stocks leading decliners.
The impact was also felt across other asset classes, with gold and oil prices suffering a decline, as did currencies viewed as riskier bets.
The Australian dollar went under $0.90, while the Japanese yen -- viewed more as a safe-haven currency -- briefly hit another 14-year high against the U.S. dollar and also gained against other major currencies, which hurt shares of exporters in Tokyo.
In Tokyo, the Nikkei 225 Index plummeted 301.72 points, or 3.2%, to 9,081.52
In Hong Kong, the Hang Seng Index tumbled 1.075.91 points, or 4.8%, to 21,134.50, for Tokyo and Hong Kong’s worst percentage falls since March,
Regional markets were tracking the declines made Thursday in Europe after Dubai World, the city state's largest corporate entity, asked creditors for a six-month standstill on debt repayments of $59 billion U.S.
Financials across the region took a hit amid concerns about banks' potential exposure to Dubai World's debt, and other debt issued in Dubai more generally. Major banks in Australia were down sharply, with National Australia Bank off 4% and Westpac Banking Corp. down 3.8%.
In Hong Kong, HSBC fell 7.6% and Standard Chartered slumped 8.6%, with Shinhan Financial down 6.3% in Seoul.
That's even as banks in Asia said their exposure to Dubai -- if any -- was mostly small, and some analysts said markets were using the Dubai news just as an excuse to sell into gains.
Construction stocks were also caught up in the selling, with Daewoo Engineering & Construction falling 8.3% and Hyundai Engineering & Construction losing 6.9% in Seoul. In Mumbai, DLF fell 3% and Unitech dropped 3%, while engineering major Larsen & Toubro dropped 2.5%.
Japanese exporter stocks were weaker as the yen gained, with Honda Motor down 3.8%, Sony down 4.4% and Canon off 2.7%.
The greenback went below 86 yen in early trade and hit a 14-year low of 84.82 yen, before recovering. Mizuho Securities market analyst Yukio Takahashi said many Japanese exporters have based their earnings outlooks on the assumption of the U.S. dollar at 90 yen, with a few conservative firms basing theirs on 85 yen.
Japan's finance minister Hirohisa Fujii stepped up his rhetoric against excessive yen rises, calling the currency's recent climb "one-sided."
Resource stocks were taking a hit as the general pullback from risk sent commodity prices lower.
Rio Tinto was down 3% and BHP Billiton off 3.4% in Sydney. In Tokyo, Sumitomo Metal Mining fell 6.3% and Aluminum Corp. of China sank 6.2% in Hong Kong.
Elsewhere;
The Shanghai 300 Composite Index fell 103.26 points, or 3%, to 3,382.51
Taiwan’s Taiex index fell back 248.25 points, or 3.2%, to 7,490.91
Singapore’s Straits Times index had the day off
Korea’s Kospi index let go of 75.02 points, or 4.7%, to 1,524.50
New Zealand’s NZX Index finished 32.88 points, or 1.1%, lower to 3,094.44
Australia’s S&P/ASX 200 slipped 136.50 points, or 2.9%, to 4,572.10
