China's main share benchmark Monday fell 5.4%, suffering its biggest percentage drop of this year, as fresh moves by Beijing to rein in property prices over the weekend battered shares of real-estate developers and banks.
Shanghai’s CSI 300 Index dumped 179.91 points, or 5.4%, to 3,176.42
The steep mainland losses came as the rest of the region suffered sharp declines on news that U.S. regulators filed civil fraud charges against Goldman Sachs Group, hurting market sentiment.
Airlines also retreated across the region as worries spread that disruption to flights across Europe will drag on.
In Tokyo, the Nikkei 225 tumbled 193.41 points, or 1.7%, to 10,908.77
In Hong Kong, the Hang Seng index collapsed 460.09 points, or 2.1%, to 21,405.17.
Financial stocks sank across the region after Goldman Sachs shares tumbled 13% Friday, marking the stock's biggest one-day dollar drop in its history. That came after the U.S. Securities & Exchange Commission filed civil charges against Goldman and one of its vice presidents for allegedly defrauding investors through the use of a financial product tied to subprime mortgages.
Sentiment was further hurt on news that the U.K. and other European nations might also investigate the investment bank in the wake of the U.S. regulators' charges.
The Goldman Sachs fraud charges "certainly spooked investors in the U.S., and is likely to make the stock market undergo a short-term correction," said one expert, adding "there are no signs yet that this matter will develop into a systemic risk issue for financial markets."
In Tokyo, Mitsubishi UFJ Financial Group fell 3.1% and Nomura Holdings lost 2.8%. Australia & New Zealand Banking Group lost 2.4% in Sydney, Fubon Financial Holding fell 3.8% in Taipei and KB Financial lost 2.1% in Seoul. In Hong Kong, heavyweight HSBC Holdings lost 3.2% and Standard Chartered gave up 3.8%.
Regional airlines also traded lower as a giant cloud of ash spread across Europe due to an erupting volcano in Iceland. That has led to airspace being closed and the cancellation of over 60,000 flights since Thursday, according to the European air traffic coordinating agency, Eurocontrol.
Qantas Airways dropped 2% in Sydney, Air New Zealand shed 2.8%, Air China sank 8.1% in Shanghai and Cathay Pacific Airways closed 0.9% lower in Hong Kong, while Singapore Airlines gave up 3% in afternoon trade.
Japan Tobacco fell 2.6% after the U.K. Office of Fair Trading said Friday it fined two tobacco manufacturers and nine retailers a total of 225 million pounds sterling ($344 million U.S.) for unlawful price fixing of tobacco products during a three-year period from 2001. One of the companies fined was Gallaher Group PLC, which is a subsidiary of Japan Tobacco.
In foreign exchange markets, the euro fell sharply as risk appetite dried up following the decline in U.S. shares. The single currency was buying $1.3457 U.S. from $1.3506 U.S. late Friday in New York, and 123.53 yen from 124.47 yen. The dollar was at 91.79 yen from 92.15 yen.
CHINA
One expert said that although most Chinese property shares have lost between 15% and 20% in recent days, they may not have hit bottom yet.
Cinda Real Estate Co., Shanghai New Huangpu Real Estate Co., Yunnan Metropolitan Real Estate Development Co., Oceanwide Real Estate Group and China Merchants Property Development were among stocks that sank by the day's 10% limit on mainland bourses. Several banks also lost heavily, with Bank of Ningbo shrinking 9.3%, while China Merchants Bank Co. skidded 6.4%.
The stocks were reacting to news on Saturday that China's State Council had introduced more property-sector-tightening measures in a bid to curb speculation after the initial measures introduced Thursday.
The new measures include allowing banks to refuse additional mortgages for home buyers who already own two or more properties as well as allowing local governments to take temporary measures to limit the number of property purchases each investor makes within a certain period.
Elsewhere;
Korea’s Kospi index moved down 29.19 points, or 1.7%, to 1,705.30
Singapore’s Straits Times Index lost 46.26 points, or 1.5%, to 2,960.93
Taiwan’s Taiex index let go of 257.35 points or 3.2% to 7,854.22
New Zealand’s NZX 50 Index subsided 29.11 points, or 0.9%, to 3,282.20
Australia’s S&P/ASX 200 skidded 69.60 points, or 1.4%, to 4,915.10
