Asia Markets Tank On U.S. Recession Fears

Most Asian markets tumbled Monday as investors reacted nervously to a steep decline on Wall Street Friday after disappointing economic and corporate news reawakened worries about a U.S. recession.

Japan's Nikkei 225 index plunged 4.5 percent to close at 12,992.18, and India's benchmark stock index slid 5.3 percent.

The Bombay Stock Exchange's 30-share Sensex index dropped more than 939 points to a provisional close of 16,639.54 points.

On the broader National Stock Exchange, the 50-company S&P Nifty index also slipped 279 points, or 5.4 percent, to 4,944 points.

Markets in Hong Kong, South Korea and Australia also fell sharply. However, shares in mainland China advanced.

Investors across much of the region dumped shares after a series of depressing economic and corporate reports Friday out of the United States - a vital export market for Asia - sent the Dow Jones industrial average falling 315.79, or 2.51 percent, to 12,266.39.

The bad news included poor quarterly results from American International Group Inc. and Dell Inc. and weaker-than-expected results on the Chicago purchasing managers index, which painted a dreary picture of the manufacturing sector.

"It's all due to fears of a recession in the U.S.," said Craig James, chief equities economist at CommSec in Sydney, Australia.

The dollar's drop to a three-year low against the yen also weighed on sentiment in Tokyo as dollar weakness erodes overseas earnings at Japan's exporters.

The greenback fell as low as 102.92 yen, its lowest point since January 2005. By mid-afternoon in Tokyo, the dollar bought 103.17 yen, down from 103.96 yen late Friday in New York. The euro also rose to $1.5215 from $1.5194.

Asian markets, which have fallen much of the year so far, had staged a modest recovery through the middle of last week, with Tokyo's Nikkei climbing to a seven-week high last Wednesday.

But pessimism returned Monday, with Hong Kong's Hang Seng index down 3 percent at 23,614.50 in afternoon trading.

In Seoul, the Korea Composite Stock Price Index fell 2.3 percent to 1,671.73, Australia's benchmark S&P/ASX200 index slid 3 percent to 5,405.8. India's Sensex fell 3.3 percent to 16,992.57.

Markets in mainland China bucked the trend. The benchmark Shanghai Composite Index was up 2.3 percent at 4,446.25.

The Tokyo market, Asia's largest, was likely to remain volatile for the rest of the week, said Koji Takeuchi, senior economist at Mizuho Research Institute.