Asian markets decline sharply on U.S. economic fears (MarketWatch) (03-10-2008)

HONG KONG (MarketWatch) -- Asian markets declined sharply on Friday as inflation concerns took over with the plunge on Wall Street. Machinery stocks like Komatsu suffered heavy losses in Tokyo and a fall in commodity prices hurt BHP Billiton in Sydney and Cnooc in Hong Kong. According to analysts this may be largely due to hedge funds liquidating their positions to hoard cash.

In Tokyo, the Nikkei 225 Average fell as low as 10,943.93 during the morning session, dropping below the 11,000-point level for the first time since May 2005. The benchmark was recently down 1.5% at 10,982.53, while the broader Topix index fell 2.5% to 1,050.50.

Australia's S&P/ASX 200 index dropped 2.2% to 4,657.90, New Zealand's NZX 50 index shed 2.5% to 3,151.54, Taiwan's Taiex gave up 0.6% to 5,670.92, Singapore's Straits Times index lost 2% to 2,315.32 and Thailand's SET index dipped 0.9% to 592.19.

In Mumbai, the Sensitive Index, or Sensex, dropped 1.4% to 12,871.68 in the early minutes.

In Hong Kong, the Hang Seng Index fell 2.2% to 17,813.32, while the Hang Seng China Enterprises Index declined 2.7% to 9,078.89, with both indexes reversing gains from the previous session.

In Hong Kong, Hang Seng Bank dropped 5.6% a day after the Hong Kong lender said it held "certain senior debt securities" issued by Washington Mutual, although it added that "such exposure is immaterial."

Resource stocks were also weighed down by sharp losses in commodity prices overnight, with BHP Billiton dropping 4.5% and Rio Tinto shedding 4.7% in Sydney. In Hong Kong, Cnooc fell 4.5% and gold miner Zijin Mining Group Co. shed 6.1%, while Inpex Holdings Inc. fell 6.4% in Tokyo.

Source: MarketWatch