Asian markets fell sharply Tuesday, with South Korea's shares and the currency taking a beating on rising geopolitical tensions, while exporters and financials around the region were hammered on renewed worries about Europe's debt problems.
Tokyo’s Nikkei 225 tumbled 298.51 points, or 3.1%, to 9.459.89, its lowest finish since November 30
In Hong Kong, the Hang Seng index collapsed 682.26 points, or 3.5%, to 18,985,50, its weakest close since last July.
South Korea's Kospi was beaten down, dropping as much as 4.5% at one point, after the Yonhap news agency reported that North Korean leader Kim Jong-il has ordered the military to be ready for combat.
The report cited a local North Korea watch group as saying its sources in North Korea reported the orders were announced in a public broadcast.
The Yonhap report comes after a multinational investigation last week concluded that a North Korean submarine torpedoed a South Korean warship in March. The report also led to a selloff in the won, prompting a reported intervention by the South Korean central bank to protect the currency.
Traders estimated the Bank of Korea sold $2 billion in U.S. dollars to support the won, according to Dow Jones Newswires. The U.S. dollar, which topped 1,275 won during the session, was buying 1,250 won after the central bank intervention was reported, compared with 1,213 won late in the previous session in New York.
Losses were broad-based, with KB Financial dropping 5%, Korea Life Insurance Co. slumping 8% and STX Offshore & Shipbuilding Co. dropping 7.1%. Airlines and travel agency stocks also took a hit on concern that overseas-travel demand may weaken, with Asiana Airlines tumbling 9.9%.
European shares dropped sharply in early trading and U.S. index futures slumped, meanwhile, piling pressure in late Asian trading.
Exporters and financials were hit hard around the region as risk aversion escalated.
Sony Corp. fell 5% and Nissan Motor Co. slid 4.7% in Tokyo.
Samsung Electronics dropped 3.3% in Taipei, and Foxconn International Holdings plunged 9.7% in Hong Kong.
Synthetic-fiber maker Toray Industries dropped 8.4% after the company said late Monday that it will raise up to 109.49 billion yen ($1.22 billion U.S.) via a new share issue.
Financials also skidded, with Sumitomo Mitsui Financial Group dropping 3.1% in Tokyo, United Overseas Bank down 2.7% in Singapore trade, HSBC dropping 2.9% in Hong Kong.
In Sydney, miners also lost ground to reflect the weak recent trend in commodity prices. BHP Billiton slumped 4% and Rio Tinto lost 3.8%, while National Australia Bank lost 3.3% among lenders.
Shares of Prudential PLC made a weak debut in Hong Kong and Singapore. The shares were listed by way of introduction as the British insurance giant taps the region to help fund its $21-billion U.S. takeover of Asian insurer AIA and without including any new shares.
Prudential plans a deeply discounted rights issue to finance the AIA deal, offering 11 new shares for every two shares held, priced at 1.04 pounds each, or an 80.4% discount to the U.K.-listed shares' previous close. CLSA analyst Patricia Cheng said she is concerned by the mega-deal's price tag and called Prudential's Asian expansion plans "unrealistic."
The stock ended at 57.20 Hong Kong dollars ($7.30 U.S.), compared with its opening price of 59.70 Hong Kong dollars, and was at 7.37 Singapore dollars ($5.26 U.S.) in late trade, after opening at 7.72 Singapore dollars.
In foreign-exchange markets, the euro remained under pressure after falling Monday on renewed worries over the euro-zone financial system.
The single currency was fetching $1.2233 against the U.S. dollar, compared with $1.2383 U.S. late Monday in New York, and 109.91 yen versus 111.92 yen. The dollar was buying 89.86 yen, compared with 90.40 yen.
Elsewhere;
Shanghai’s CSI 300 fell 59.53 points, or 2.1%, to 2,813.94
Singapore’s Straits Times Index lost 73.26 points, or 2.7%, to 2,650.61
Korea’s Kospi index retreated 44.10 points, or 2.8%, to 1,560.83
Taiwan’s Taiex index surrendered 236.36 points, or 3.2%, to 7,086.37
New Zealand’s NZX 50 Index dropped 57.40 points, or 1.9%, to 3,003.87
Australia’s S&P/ASX 200 gave back 130.10 points, or 3%, to 4,265.30
