HONG KONG - ASIAN stocks tumbled again on Wednesday - with the major markets taking big hits - on growing concerns that the global economy is about to go into a deep recession.

Traders ran to the sidelines across the region, after two days of positive movement, with the yen strengthening as they looked for a safe haven for their money.

The Tokyo market plunged 6.79 per cent as exporters were hit by a stronger currency and as concerns moved to the real economy.

Hong Kong was also battered, shedding 5.2 per cent, dragged down to a three-year low by news that Citic Pacific would be investigated by the city's market watchdog over improper currency bets. The firm lost almost a quarter of its value after the announcement.

The Beijing-backed company said Monday the bets could cost it up to two billion US dollars.

Sydney was 3.4 per cent lower as commodity prices continued to tumble as the recession fears led to demand worries. Seoul and Singapore also tanked, shedding just over five percent.

Shanghai was also more than three percent lower on continued stress over the future outlook for the Chinese economy, which is beginning to feel the effects of the global credit crisis.

Taipei lost 1.62 per cent, while Mumbai lost 4.81 per cent and Jakarta was 4.2 per cent down.

Markets had been nervous all day following a sharp fall on Wall Street on the back of a string of bad corporate results that reaffirmed recessionary fears.

The Dow's 2.5 per cent drop came despite an offer by the US Federal Reserve to supply up to 540 billion dollars (S$808 billion) of help to money market mutual funds in its latest response to the financial crisis.

The Canadian central bank declared the US economy in recession as it announced a second unscheduled interest rate cut this month to stimulate domestic demand.

The weakening market outlook led investors to the Japanese currency - sending it below 100 against the greenback at one point and hitting 127 to the euro.

Exporters prefer a weaker yen as it makes buying Japanese goods cheaper.

Oil also felt the effects of the sagging confidence, falling below 70 dollars a barrel in Asian trade, while gold also continued its downward trend as it closed 27 dollars down from Tuesday at 758.00-759.00 US dollars an ounce.

In other markets Manila was 1.1 per cent lower, Wellington shed 1.78 percent, Kuala Lumpur was 1.5 per cent off and Bangkok lost 2.83 per cent.

Tokyo stocks plunged 6.79 per cent.
While there were hopes that authorities have thwarted a financial system meltdown, fears of a prolonged worldwide economic downturn mounted.

The Nikkei fell 631.56 points to 8,674.69, snapping a three-day rebound.

The Topix index of all first-section shares lost 67.41 points, or 7.05 per cent, to 889.23, following an overnight drop on Wall Street.

'A sudden fall in the euro was a negative surprise to investors,' said JPMorgan equity strategist Masaru Ohnishi told Dow Jones Newswires.

'If the euro falls further against the yen, the market may see more selling in exporters.'

The Tokyo market was also spooked by media reports that auto giant Toyota Motor and megabank Mitsubishi UFJ Financial are likely to suffer sharp falls in earnings.

Exporters with exposure to the European market were hardest hit. Mazda Motor dived 13 per cent to 247 yen. Toyota Motor lost 6.9 per cent to 3,530 yen, while Honda Motor dropped 7.2 per cent to 2,260 yen.

Mitsubishi UFJ slid 8.8 per cent to 774 yen.

NEC Electronics plunged 20 per cent to an all-time low of 1,210 yen after the firm lowered its earnings outlook.

Sony fell 9.3 per cent to 2,450 yen and Canon lost 6.1 percent to 3,250 yen.

Hong Kong shares closed 5.2 per cent down.
The benchmark Hang Seng Index fell 774.57 points to 14,266.6. Turnover was light at 54.09 billion Hong Kong dollars (S$10.4 billion).

Citic Pacific fell 24.69 per cent after the Securities and Futures Commission said it had launched an investigation into its improper currency bets.

The company's stock has lost 66 per cent of its value since Friday.

However, with easing tensions in the credit market, Ernie Hon, strategist at ICEA Securities, told Dow Jones Newswires he expects sentiment in the market to improve by the end of the month when the US corporate reporting season ends.

Australian share prices dropped 3.4 per cent.
The benchmark S&P/ASX200 index fell 146.4 points to close at 4,156.1 while the broader All Ordinaries fell 131.4 to 4,120.0.

Turnover was a light 1.09 billion shares worth 3.79 billion dollars.

The National Australia Bank gained 4.0 per cent to 25.65 dollars after posting 2009 cash earnings of 3.92 billion dollars Tuesday.

ANZ added 0.8 per cent to 19.00 dollars but the Commonwealth Bank of Australia slipped 3.0 per cent to 41.89 dollars and Westpac shed 4.6 per cent to 22.05 dollars.

Rio Tinto climbed 5.4 percent to 78.40 dollars but the world's biggest miner BHP Billiton fell 7.0 percent to 27.25 dollars.

Taiwan share prices closed 1.62 per cent lower.
The weighted index was down 80.13 points to 4,862.59 on turnover of 47.04 billion Taiwan dollars (S$2.14 billion).

Construction led the fall with a 3.58 percent decline, followed by cement which dropped 2.47 percent. Textiles were down 1.91 per cent, electronics lost 1.90 percent and financials shed 1.74 per cent.

Analysts said the market's relatively marginal fall, compared with others in the region, was made possible by the buying of government funds and the cutting of the downward limit on stocks from 7.0 percent to 3.5 percent.

Taiwan Semiconductor Manufacturing Co, the world's leading contract microchip maker, was at 42.6 dollars, and rival United Microelectronics Corp was at 8.98 - both limit-down.

Indonesian shares slumped 4.2 per cent.
The Jakarta Composite Index slid 60.41 points to 1,379.74.

The main index has fallen 50 percent since the start of 2008.

Bank Mandiri, the nation's largest bank by assets, fell 9.6 per cent to 1,780 rupiah and Bank Danamon slumped 9.9 per cent to 2,725. -- AFP

KUALA LUMPUR
Malaysian stocks fell 1.5 per cent on Wednesday, tracking sharp losses in regional markets amid growing concerns of a weaker corporate earnings outlook, dealers said.

The Kuala Lumpur Composite Index shed 13.88 points to end the day at 904.28 on turnover of 510 million shares worth 1.07 billion ringgit (S$425 million) while losers led gainers 472 to 143 and 220 counters were unchanged.

Analysts said investors were concerned at a weaker outlook for economic growth and corporate earnings amid heightened concerns of a recession.

'It is a regional phenomenon following the lower-than-expected technology earnings on Wall Street and falls on commodities and concerns that the credit crunch is spilling over into broader markets and earnings,' said technical analyst Stephen Soo from local brokerage TA Securities.

SHANGHAI
Chinese share prices closed down 3.20 per cent on Wednesday led by energy firms after a leading power generator reported weaker-than expected earnings for the third quarter, dealers said.

The benchmark Shanghai Composite Index, which covers A and B shares, was down 62.71 points at 1,895.82 on turnover of 32.4 billion yuan (S$7.04 billion).

The Shanghai A-share index fell 65.82 points to 1,991.38 on turnover of 32.2 billion yuan, while the Shenzhen A-share index lost 8.84 points, or 1.62 percent, to 536.53 on turnover of 13.4 billion yuan.

HONG KONG
Hong Kong shares closed 5.2 per cent down to a three-year low on Wednesday, dragged by Citic Pacific after its warning that it was facing a potentially huge foreign exchange loss, dealers said.

The benchmark Hang Seng Index fell 774.57 points to 14,266.6.

Analysts said they expect the market to remain volatile in the coming sessions, because worsening economic and corporate earnings data could negate the positive impact from the government?s recent market-stabilising measures.

They said investors were also worried that more companies may be exposed to huge forex losses.

However, they believed the index is approaching a near-term bottom, and should find strong support at 13,500 points.

'Investors have less interest in trading shares, and such a trend will continue,' Mr Ernie Hon, a strategist at ICEA Securities, told Dow Jones Newswires.

However, with easing tensions in the credit market, Hon said he expects the sentiment in the local market to improve by the end of the month when the US corporate reporting season ends.

'Many investors are worried that other smaller companies may also be exposed to a potentially huge amount of forex losses as well, resulting in panic selling of some counters,' said Peter Lai, a director at DBS Vickers.

Mr Lai said Hong Kong stocks are now generally 'very, very attractive' given cheap valuations. He said investors may consider buying some 'good quality' blue chips, such as Chinese banks and infrastructure firms.

SEOUL
South Korea's benchmark stock index has closed sharply lower following declines on Wall Street and in other Asian markets.

The Korea Composite Stock price Index fell 61.51 points, or 5.1 per cent, to finish on Wednesday at 1,134.59.

At one point, the Kospi fell as much as 8.4 per cent before recovering some losses.

In New York on Tuesday, the Dow Jones industrial average fell 2.5 per cent to 9,033.66.

The South Korean won fell 3.1 per cent against the US dollar to 1,363, bringing its decline for this year to 31.3 per cent.

TOKYO
Tokyo stocks plunged on Wednesday, hit by growing fears of a global recession and a surging yen, which added to worries about the increasingly bleak outlook for Japanese exporters.

While there were hopes that authorities have thwarted a financial system meltdown, fears of a prolonged worldwide economic downturn mounted. The Nikkei fell 631.56 points, or 6.79 per cent, to 8,674.69, snapping a three-day rebound.

The Topix index of all first-section shares lost 67.41 points, or 7.05 per cent, to 889.23, following an overnight drop on Wall Street.

The soaring yen knocked exporter shares lower. The dollar slipped below 100 yen and the euro dropped to 127 yen as high-yielding currencies dropped on expectations of further interest rate cuts to boost flagging economic growth.

The Tokyo market was also spooked by media reports that auto giant Toyota Motor and megabank Mitsubishi UFJ Financial are likely to suffer sharp falls in earnings. -- AFP, THOMSON REUTERS