HONG KONG - ASIA'S stocks were hammered again on Monday, with Hong Kong losing almost 13 per cent and Japan hitting a 26-year low, as traders ignored emergency steps by world governments and a unity pledge by the G7.

Markets across the region were in freefall as traders went into a massive sell-off as fears over a global recession continued to weigh on sentiment.

Hong Kong's Hang Seng Index ended that day 12.7 percent down - its biggest single day percentage drop since 1991 - while Tokyo shed 6.36 per cent to its lowest level since 1982.

Sydney fell 1.6 per cent, Manila reeled from a 12.3 percent plunge to its lowest in three years and Taipei dropped 4.65 per cent, while Shanghai shed 6.32 per cent.

And the Thai bourse was suspended for 30 minutes after it dived more than 10 percent, triggering an automatic shut-down. It closed 10.50 per cent lower.

Bucking the trend, the Seoul market recovered from heavy early losses to end 0.8 per cent higher after South Korea?s central bank cut its key interest rate by 75 basis points, its largest reduction yet.

The fresh turmoil came despite a pledge by the Group of Seven major economies to cooperate to bring stability to the ailing financial system.

The group - comprising Britain, Canada, France, Germany, Italy, Japan and the United States - sought to calm nerves by affirming its 'shared interest in a strong and stable international financial system.'

It also voiced concern about 'excessive volatility' in the value of the yen, which Friday soared to a 13-year high against the dollar as worried investors fled to the relative safety of the Japanese currency.

But the G7 statement had only a fleeting impact on the market, which is waiting to see whether the rich nations' club will go so far as to launch joint market intervention to sell the yen.

The yen is unlikely to fall significantly unless the G7 takes 'drastic steps such as intervention,' said Mr Kenichi Yumoto, vice head of forex trading at Societe Generale in Tokyo.

Japanese Prime Minister Taro Aso announced fresh measures to support the ailing stock market including a bigger government fund to pump capital into banks if needed.

US and European markets suffered heavy losses on Friday, with Wall Street's Dow Jones index ending down 3.59 per cent.

Markets expect fresh steps by global authorities this week to try to stabilise shaky markets. The US Federal Reserve is expected to cut interest rates Wednesday from the current level of 1.5 per cent.

Investors are also waiting for Thursday's US gross domestic product figures for the third quarter, which are expected to show a contraction.

A slew of economic indicators and corporate results are also due this week in the United States, Europe and Japan, which analysts said were unlikely to give much cause for optimism.

In other markets Jakarta was down 6.3 per cent and Mumbai shed 2.2 per cent.

Wellington, Kuala Lumpur and Singapore were all closed for public holidays.

Tokyo Japanese stocks plunged more than six per cent. The Nikkei fell 486.18 points, or 6.36 percent, to end at 7,162.90, the lowest since October 1982.

'The Nikkei could fall further,' JPMorgan strategist Masaru Ohnishi told Dow Jones Newswires, adding that it could drop below 7,000 points.

The index has fallen 53 per cent this year and is more than 80 percent off its all-time high of 38,915 reached in December 1989.

The broader Topix index of all-first section shares fell 59.65 points, or 7.40 per cent, to 746.46.

'It was a big disappointment,' said Fujio Ando, senior managing director at Chibagin Asset Management.

Prime Minister Aso said Japan would tighten restrictions on 'short-selling' of borrowed shares and set aside more money for possible bank bailouts, but he did not say how much.

Exporters continued to be pressured by worries about the stronger yen, which is putting a big dent in Japanese companies' overseas earnings.

Sony slid 7.7 per cent to 1,821 yen, Toyota Motor fell 8.1 percent to 2,940 yen and Canon shed 11 per cent to 2,375 yen.

Top banks were battered by media reports that they may issue new shares to shore up their ailing balance sheets.

Mitsubishi UFJ Financial lost 15 per cent to 583 yen. Mizuho Financial dropped 15 per cent to 230,000 yen and Sumitomo Mitsui Financial declined 12 percent to 385,000 yen.

Hong Kong Hong Kong share prices closed 12.7 per cent lower. The benchmark Hang Seng Index nosedived 1,602.54 points to 11,015.84, its lowest closing figure since May 2004. The index traded between 10,676.29, a low unseen since August 2003, and 12,736.85.

Turnover was HK$56.83 billion (S$11 billion).

Panic-selling saw the market fall as much as 15.4 per cent during the afternoon.

Global banking giant HSBC led the market lower, and was one of many blue chips posting double-digit losses.

Dealers said investors were just grabbing cash.

'They are selling, without asking for prices. All they need is money,' Dao Heng's Eric Yuen told Dow Jones Newswires.

Hong Kong's drop did not match its worst one-day fall, a 33.33 per cent collapse on October 26, 1987.

'We have never seen such a landslide in shares,' Mr Chan said. 'The speed at which the market is plunging is much faster than expected.'

China Mobile dropped 6.4 per cent to 53.80 dollars, its lowest close since September 26, 2006.

Bank of China ended 15 per cent lower at 1.71 dollars, Ping An Life fell 15 per cent to 24.00 dollars and Bank of Communications dropped 14 per cent to 3.47 dollars.

SYDNEY Australian share prices closed down 1.6 per cent. The benchmark S&P/ASX 200 dropped 60.2 points to close at 3,809.2 while the broader All Ordinaries Index fell 63.3 points, or 1.7 per cent, to end the day at 3,768.3. It was the lowest close for the S&P/ASX200 since November 2, 2004.

Turnover was some 1.2 billion shares worth AU$3.44 billion (S$3.17 billion).

Dealers said the falls on the Australian market were not as bad as they could have been.

ANZ fell 3.1 per cent to 17.00, National Australia Bank lost 3.2 per cent to 23.92 and Commonwealth Bank dropped 2.0 per cent to 40.02.

But miner BHP Billiton rose 0.9 per cent to AU$24.60 while Rio Tinto added 0.9 per cent to AU$64.65.

Shanghai Chinese share prices closed down 6.32 per cent.

Dealers said concerns over the economic slowdown outweighed Beijing's latest attempt to boost the market, while weak third-quarter earnings posted by some heavyweight banks and insurance companies further dented investor interest.

The benchmark Shanghai Composite Index, which covers A and B shares, was down 116.27 points at 1,723.35 on turnover of 32.2 billion yuan (S$7.1 billion).

The last time the key index, which has plummeted nearly 70 percent since the start of this year, finished so low was on September 18, 2006.

The finance ministry announced on Sunday that taxes on interest earned in securities accounts held by individuals had been cancelled, but traders said the move was too small to boost sentiment.

PetroChina, the biggest index component, was down 6.4 per cent to 9.95 yuan.

China Construction Bank fell 5.1 per cent to 3.69 yuan after it reported its third-quarter net profit rose just 12.11 per cent year-on-year, with growth down sharply from the 71.44 per cent rise posted in the first half.

China Vanke slid by the 10 per cent daily trading limit to 5.88 yuan.

Baoshan Iron and Steel, the country's largest steel producer, shed 9.8 per cent to 4.69 yuan.

Taipei Taiwan share prices closed down 4.65 per cent.

The weighted index fell 212.75 points to 4,366.87, off a low of 4,301.33 and a high of 4,391.95, on turnover of 35.87 billion Taiwan dollars (S$1.62 billion).

The market opened sharply lower after the government Sunday removed the controversial market support measure of halving the daily downward limit to 3.5 per cent.

The measure had been blamed for the local bourse's recent artificial resilience compared with its regional counterparts.

Taiwan Semiconductor Manufacturing Co. fell 3.65 per cent to 38.30 dollars and United Microelectronics Corp. shed 6.93 per cent to 7.79.

Chinatrust Financial slipped 6.93 per cent to 9.54 and Cathay Financial dropped 6.93 per cent to 30.20.

China Airlines rose 5.85 per cent to 6.33 on falling oil prices.

SEOUL South Korean shares recovered from sharp intraday falls to close 0.8 per cent higher.

The KOSPI index ended up 7.70 points at 946.45, ending a four-day losing streak. Volume was 531.3 million shares worth 5.74 trillion won (S$6.01 billion).

'Investors seemed to take some comfort with the central bank's market stabilisation measures including a sharp rate cut,' said Mr Park Seok-Hyun, an analyst at Eugene Investment and Securities.

The Bank of Korea earlier announced that it had cut its key interest rate by 0.75 percentage point to 4.25 per cent and planned to buy up to 10 trillion won worth of bonds issued by local lenders.

Samsung Electronics surged 7.48 per cent to 438,000 won, while second-ranked LG Electronics jumped 6.52 per cent.

Top steelmaker POSCO ended up 8.68 per cent at 263,000 won.

Shipyard Samsung Heavy Industries fell 14.75 per cent to 11,850 won and Samsung Securities lost 5.11 percent to 52,000.

Jakata Indonesian shares shed 6.3 per cent. The Jakarta Composite Index dropped 78.45 points to a three-year low of 1,166.40 in thin trade.

Top decliners included heavyweight Telkom, which fell 9.3 per cent to 5,350 rupiah while Bank Mandiri dropped 9.5 per cent to 1,340 and car distributor Astra slumped 10 per cent to 8,100.

However, shares in Indosat rose 9.9 per cent to 5,000 rupiah after the government confirmed Monday that Qatar Telecom can own up to a 65 per cent stake in it.

Bangkok Thai share prices closed 10.50 per cent lower as fears over a global financial meltdown caused the market to tumble and prompted the suspension of trading for 30 minutes, dealers said.

They said the Thai bourse hit a five-year low as it fell in line with Asian markets.

The Stock Exchange of Thailand (SET) composite index fell 45.44 points to close at 387.43 points.

Manila Philippine shares closed down 12.3 per cent. The composite index lost 239.66 points to 1,713.83 after falling through the 10 percent level in the late morning, which triggered an automatic trading halt.

Banco de Oro plunged 24 per cent to 22.50 pesos and Philippine Long Distance Telephone fell 14.2 per cent to 1,850 pesos.

Ayala Corp. dropped 11.9 per cent to 200 pesos. San Miguel A shed 2.3 per cent to 42 pesos, while its B shares were 4.5 per cent down to 42 pesos.

Mumbai Indian shares fell 2.2 per cent, recovering on bargain hunting from a sharp intra-day 11.5 per cent plunge.

The benchmark 30-share Sensex closed down 191.51 points to 8,509.56.

Malaysia and Singapore stock markets were closed for a holiday. -- AFP