Asian stocks tumble on US gloom

Major markets slide nearly 4 per cent as worsening US slowdown erodes recovery hopes.

    Waning confidence in the international finance system continued to weigh down Asian markets [AFP]

    Markets in Australia, Taiwan and Singapore also shed about three per cent or more.

    Australian stocks fell 2.8 per cent to their lowest in five years as gloomy domestic economic data underlined the risk that Australia's economy was slipping closer to recession.

    China's Shanghai Composite however bucked the trend and gained 0.5 per cent.

    Shares in Sony Corp also gained some ground on Monday following last week's announcement of an internal shake-up.

    Unease

    Friday's news that the US economy shrank at 6.2 per cent in the last quarter of 2008 - its fastest quarterly contraction in more than 25 years - saw stock markets in Europe and on Wall Street tumble at the end of last week.

    Adding to investor unease was news that the US government was moving to increase its stake in trouble banking giant Citigroup, raising fears of even greater state intervention in the banking sector.

    That added to pressure on banking stocks in Japan when Toyko opened for business on Monday morning.

    Mitsubishi UFJ Financial Group was among the biggest losers, falling over six per cent following other banks that also dropped on concerns about the US financial sector.

    Automotive stocks were also dented after industry data showed that sales of new cars, trucks and buses plunged 32.4 per cent in February compared to a year earlier.

    Japan's auto sector has been battered by a steep decline in spending, with consumers opting to save amid the downturn.

    The seventh straight-month decline comes as Asia's largest economy endures its worst recession in decades.

    SOURCE: Agencies


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