Markets across Asia were blasted by a wave of selling Tuesday, with creditors of Lehman Brothers among the leading decliners, followed by consumer exporters, as investors reassessed the outlook for global growth in the wake of the growing credit crunch.
Japan's benchmark Nikkei 225 index was down 5.3 percent to 11,560.66 in mid-afternoon trading, while Hong Kong's blue-chip Hang Seng Index shed 5.7 percent.
On the economic front, Tokyo condominiums for sale declined by an annual 38.8% in August compared to the previous month's 44.5% decrease, according to data released by the Japanese Real Estate Economic Research Institute. In August, there were 10,504 unsold units on the Tokyo market, a fall from July's 10,885.
Meanwhile, Japan's consumer confidence dropped to a new record low of 30.1 in August from 31.4 in July, results of the latest survey by the Cabinet Office showed. The reading fell for the fifth month in a row. The report said the headline index along with the sub-indices of overall livelihood, income growth and the willingness to buy durable goods were the lowest since June 1982.
Additionally, the Bank of Japan's monetary policy board commenced its two-day session today to decide on its monetary policy.
Stocks fell across the board, led by financials and exporters.
Among financial stocks, Mizuho Financial Group plunged 10.68%, while Mitsuibishi UFJ Financial Group plummeted 7.9%. Midsize banks Aozora Bank and Shinsei Bank sank on concerns over their relatively large exposure to Lehman Brothers. Aozora and Shinsei tumbled 16% each.
Mitsui Sumitomo Insurance dropped 9.7%, Sompo Japan Insurance slumped 10.5%, top brokerage Nomura Holdings lost 9.8%, and Daiwa Securities Group gave away 8.1%.
Lehman Brothers Japan Inc. said Tuesday that it has filed for bankruptcy protection with the Tokyo District Court following the collapse of its parent firm Monday, marking the second largest corporate failure in terms of debts in the postwar period in Japan.
Among exporters, digital camera maker Nikon shed 4.2%, Canon plunged 10.1%, Honda Motor lost 3.5%, Sony declined 5.1%, Toshiba dropped 4.2%, and Toyota Motor tumbled 3.8%.
Commodity-related stocks were also lower, with Inpex Holdings plummeting 11.3%, Nippon Mining Holding falling 7.1%, and Nippon oil giving away 4.7%. Trading House Mitsubishi Corp fell 8.1% and Mitsui & Co lost 11.6%.
In China -- the Shanghai Composite index traded 5% weaker, with the index finding little support from the People's Bank of China move to cut interest rates by 0.27-percentage points effective Tuesday. The central bank also said late Monday it would lower the reserve ratio for all but the five largest banks by 1 percentage point from Sept. 25.
Industrial & Commercial Bank of China led the Chinese banking sector lower on concerns yesterday's rate cuts, which will not apply to the interest banks must pay on cash deposits, will lead to narrower interest margins and hurt earnings outlooks. Hong Kong-listed shares of ICBC fell 7.3%.
Elsewhere:
Taiwan's Taiex closed down 4.9% at 5,756.
Singapore's STI fell 1.0% to 2,461.
Malaysia's KLCI closed down 1.9% at 1,012.
India's Senex closed down 0.1% at 13,518.
Indonesia's Jakarta Composite index closed up 1.0% at 1,735.
New Zealand's NZX-50 shed 2.8%.
Australia's S&P/ASX 200 narrowed steep losses early session to end 1.4% lower at 4,750.80.
with files from other wire services
