HONG KONG - ASIAN stock markets tumbled on Thursday, with Japan's benchmark sliding almost 5 per cent, on gloomy US holiday sales and renewed concerns about the banking industry.

Every market across Asian suffered steep declines, with broad-based selling hitting industries from energy to financials to exporters. A sharp drop in Japanese machinery pointed to a deepening recession in the world's No. 2 economy, while oil prices continued to fall on worries that the global economic slump will further weaken demand for crude.

VIDEO Apple CEO out sick (2:08)

Sentiment was pummelled after a US government report showed retail sales dropped 2.7 per cent last month, more than double the decline economists had expected and providing alarming new evidence that American consumers are pulling back their spending.

Following one of the biggest consumption binges by any one country in modern history, fuelled by rising homes values and easy credit, the US was now reeling from its worst-ever consumer recession.

'The American consumer is - as we say in the US - toast, finished, done,' Mr Stephen Roach, chairman of Morgan Stanley Asia Ltd, said on Thursday in Hong Kong. 'The consumer is going down for the count here, and there's more to come.'

Meanwhile, a flood of negative news in the financial industry reignited worries that international banks would suffer ever-bigger losses and be forced to raise billions more in capital as the world economy deteriorates.

Deutsche Bank AG, Germany's biggest bank, on Wednesday reported a 4.8 billion euro (S$9.58 billion) loss for the fourth quarter, blaming 'exceptional market conditions'. Analysts said HSBC PLC, Europe's largest bank, may have to raise US$20 billion (S$29.94 billion) to US$30 billion and slash its dividend.

In the US, reports surfaced late on Wednesday that the government was closed to supplying Bank of America Corp, the nation's biggest bank by assets, with billions of dollars more in aid after it agreed to acquire debt-ridden Merrill Lynch & Co.

'Everybody is worried the global recession will hurt bank earnings because of bad debt,' said Mr Francis Lun, general manager of Fulbright Securities Ltd in Hong Kong. 'And retail sales are very bad. Things are bad for everybody.'

In Tokyo, the Nikkei 225 stock average fell 415.14 points, or 4.9 per cent, to 8,023.31, with sentiment further hurt by new figures showing that Japanese machinery orders, a closely watched indicator of corporate spending, plunged in November.

Elsewhere, Hong Kong's Hang Seng Index fell 3.1 per cent to 13,287.19 after earlier sinking about 5 per cent. South Korea's Kospi dived 6 per cent to 1,111.34 while markets in Australia and Taiwan fell more than 4 per cent. Singapore's benchmark was down over 3 per cent but Shanghai stocks were only slightly lower.

In financials, HSBC skidded 4.6 per cent in Hong Kong trade to a multiyear low, and South Korea's KB Financial Group Inc plunged 9.2 per cent.

Falling prices for oil and metals pulled down commodity producers, with Rio Tinto, the world's No. 3 mining company, tanking 8.2 per cent in Australia following a significant drop in iron ore output during the fourth quarter.

Major Chinese oil firms, including PetroChina and CNOOC, sank 5 per cent or more in Hong Kong.

In Japan, Sony Corp shed 5.2 per cent, while electronics maker Nikon Corp lost 6.8 per cent and Canon Inc fell 5.6 per cent.

The sell-off followed markets in Europe and the US, where the Dow Jones index fell 248.42, or 2.9 per cent, to 8,200.14, its lowest close since Dec 1. All 30 stocks that make up the Dow fell. The S&P 500 fell 29.17, or 3.4 per cent, to 842.62.

With US futures flat to lower, Wall Street was poised to add to its losses. Dow futures were off 19 points, or 0.2 per cent, at 8,140 while S&P500 futures gained 0.3 of a point to 840.10.

Oil prices lost ground again, with light, sweet crude for February delivery off 59 cents at US$36.69 a barrel in Asian trade.

The contract lost 50 cents to settle at US$37.28 overnight on demand concerns after a government report showed that crude inventories continued to grow.

In currencies, the dollar was slightly higher at 89.22 yen, down from 89.13 yen, and the euro fell to US$1.3162 from US$1.3199. -- AP

TOKYO
Japan's Nikkei stock index slumped 4.92 per cent by the close on Thursday following a raft of gloomy economic and corporate news.

The Nikkei lost 415.14 points to 8,023.31.

HONG KONG
Hong Kong share prices closed 3.4 per cent lower on Thursday, matching tumbles on bourses across the region on worries about the grim state of the global economy, dealers said.

The benchmark Hang Seng Index closed 461.65 points lower at 13,242.96, off earlier lows as investors hunted for bargains. Turnover was HK$49.38 billion (S$73.9 billion).

SHANGHAI
Chinese shares closed down 0.45 per cent on Thursday as shares in oil majors fell after Beijing cut gasoline and diesel prices for the second time in a month, dealers said.

The government cut its benchmark retail gasoline price by two percent and diesel prices by 3.2 per cent as of Thursday, the official Xinhua news agency said.

The benchmark Shanghai Composite Index, which covers A and B shares, closed down 8.66 points at 1,920.21 on turnover of 83.2 billion yuan (S$18.3 billion).

The Shanghai A-share index shed 9.13 points, or 0.45 per cent, to 2,015.95 on turnover of 83.0 billion yuan, but the Shenzhen A-share index added 2.11 points, or 0.34 per cent, to 626.67 on turnover of 41.5 billion yuan.

The Shanghai B-share Index fell 0.06 points, or 0.05 per cent, to 120.14, while the Shenzhen B-share Index lost 3.34 points, or 1.18 per cent, to 281.13.

KUALA LUMPUR
Malaysian share prices closed down 1.8 per cent on Thursday amid profit-taking after an overnight fall on Wall Street and concerns over the US economy, dealers said.

The Kuala Lumpur Composite Index lost 16.01 points to close at 897.45 with a turnover of 603.30 million shares worth RM711.63 million (S$296.6 million).

There were 123 gainers, 396 losers and 175 unchanged. -- AFP, AP