Asian markets tumbled Friday as concerns over proposed U.S. banking curbs and the prospect of China rolling out more measures to cool its economy triggered broad losses, with financials and metal shares hit especially hard.
In Tokyo, the Nikkei 225 Index jettisoned 277.86 points, or 2.6%, to 10,590.55
Hong Kong’s Hang Seng Index lost another 136.49 points, or 0.7%, to 20,726.18.
The selloff came after U.S. President Barack Obama's proposal Thursday to limit banks' risk-taking pushed the Dow Jones Industrial Average down 2%, or 213.27 points, for its biggest fall since Oct. 30.
The President said he wants financial-sector legislation to include measures to stop banks engaging in proprietary trading and investing in hedge funds and private equity.
Commodity-linked shares and financials fell across the region, with Rio Tinto giving up 3.5% and Macquarie Group down 3.2% in Sydney, and Posco falling 4.1% and Industrial Bank of Korea falling 4.9% in Seoul. Trading house Mitsubishi Corp.fell 4.5% and energy producer Inpex Corp. slid in Tokyo.
Shares of Lihir Gold dropped 2.2% in Sydney after the company said its gold output will fall slightly in 2010 and 2011 after rising 27% last year.
Hong Kong shares recovered some of their steep early losses after falling in seven of the previous eight sessions, led by Chinese banks. Although the benchmark Hang Seng Index ended in the red, the Hang Seng China Enterprises Index gained 0.2% to 11975.65.
Shares of Bank of China rose 0.5%, China Citic Bank Corp. advanced 1.9% and China Merchants Bank Co. added 1.1% on bargain buying after a string of recent losses.
In Seoul, SK Energy dropped 3.5% after reporting a fourth-quarter net loss widened from a year earlier, belying expectations of a profit.
But automobile exporters were higher on the U.S. dollar's gains against the Korean won, with Hyundai Motor up 0.5% and Kia Motors climbing 1%.
Shares of Kumho Asiana Group units were higher after the Maeil Business Newspaper reported investors in Daewoo Engineering & Construction Co. made an offer to acquire a controlling stake in Kumho Industrial Co. via a debt-equity swap and a rights issue. Kumho Industrial surged 14.9% and Kumho Tire added 4.3%, while Asiana Airlines rose 1.7%.
In Singapore, budget carrier Tiger Airways rose on its debut, after becoming the first Asian carrier to be listed in five years. The stock was trading at 1.55 Singapore dollars ($1.11 U.S.) in late trade, compared with its initial public offering at S$1.50.
In foreign exchange markets, the euro rose to $1.4141 U.S. from $1.4104 U.S. in late New York trade Thursday, and to 127.67 yen from 127.48 yen. The dollar was buying 90.25 yen from Y90.34.
CHINA
The Shanghai 300 Composite Index let go of 42.38 points, or 1.2%, to 3,336.20.
Chinese metal shares also fell sharply after Goldman Sachs downgraded some large mainland steel makers as well as Aluminum Corp. of China, saying metal producers are likely to have less pricing power than upstream companies or miners.
Among those downgraded, Baoshan Iron & Steel fell 3.3% and Aluminum Corp. dropped 1.8% in Shanghai, while Angang Steel sank 4.3% in Shenzhen.
The fall in Shanghai came amid concerns of further monetary tightening. HSBC China economist Qu Hongbin said at a conference in Hong Kong that he expected the People's Bank of China to raise banks' reserve requirements by up to 1.5 to two percentage points over the next six to eight months, while interest rates were also expected to be raised twice this year in installments of 27 basis points each time.
Elsewhere:
Korea’s Kospi Index was 37.66 points, or 2.2%, lower to 1,684.35
Taiwan’s Taiex index dropped 200.56 points, or 2.5%, to 7,927.31
Singapore’s Straits Times index subtracted 31.27 points, or 1.1%, to 2,819.71
New Zealand’s NZX Index retreated 34.86 points, or 1.1%, to 3,190.43
Australia’s S&P/ASX 200 shed 76.60 points, or 1.6%, to 4,750.60
