Asian stocks extend US rout; Nikkei drops 3% to 1-month low

Tuesday, 14 Jan 2014 | 6:07 AM ET

Asian equities were mostly lower on Tuesday with Japan's benchmark index as the region's top loser following a sharp sell-off on Wall Street overnight.

The Dow Jones Industrial Average was slammed by a triple-digit drop after Atlanta Federal Reserve President Dennis Lockhart said that the U.S. central bank should push ahead with its efforts to wind down monetary stimulus.

(Read more: Traders eye retail sales data, earnings as volatility jumps)

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Nikkei skids 3%

The world's freest economy is...
Ed Feulner, Founder and Chairman of the Asian Studies Center, The Heritage Foundation, explains why Hong Kong took this year's top spot as the most freest economy.

Japan's benchmark Nikkei resumed trade at its lowest level in a month due to a sharp uptick in the yen following Monday's holiday. The currency traded within sight of Monday's one-month high of 102.97 against the greenback following Friday's weak U.S. jobs report.

(Read more: Dollar bulls: Time to pack up and go home?)

That saw blue-chip stocks sell off across the board. Toyota Motor, Sony and Mitsubishi Electric fell over 2 percent each while index heavyweight Fast Retailing slumped 5 percent.

However, Suntory Beverage bucked the trend to gain 0.3 percent after parent firm Suntory Holdings announced it plans to buy Beam for $16 billion.

Also weighing on sentiment was data showing November's current account deficit came in wider than expected at $5.74 billion, marking the second straight month of deficits.

Shanghai up 0.9%

Mainland shares rebounded from the previous session's five-month low to break a five-day losing streak thanks to strong gains in home appliance stocks. Meanwhile, the yuan hit a new record high at 6.0415 per dollar for a second straight session.

Sichuan Changhong Electronics spiked nearly 10 percent after the Securities Times reported the production value of smart home appliances could rise to 1 trillion yuan in 2020.

Among the top gainers, Sinopec rose over 4 percent despite news that it will pay compensation for a pipeline explosion that occurred last year.

Great Wall Motor fell 0.6 percent after announcing a three-month delay in the launch of its newest sports utility vehicle.

(Read more: Yum's China sales fall short on Pizza Hut weakness)

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Nobel prize winning economist Joseph Stiglitz weighs in on the disappointing US jobs report in an interview with CNBC TV's 18 Latha Venkatesh.

Sydney drops 1.5%

Australia's benchmark S&P ASX 200 closed at its lowest level in over three weeks on caution ahead of the corporate earnings season. Data from Thompson Reuters showed the index posted its biggest one-day decline in over three months.

Meanwhile, the Australian dollar retreated from a one-month high of $0.9087 U.S. cents.

Banks and resources led declines with all of Australia's "Big 4" lenders down over 1 percent each while blue-chip miners BHP Billiton closed down 1 percent and Atlas Iron fell 3.6 percent on falling iron-ore prices.

Engineering firm Forge closed 18 percent lower following an earlier 30 percent slump after warning of an additional $23 million to its previously announced $28 million profit write-down for the 2014 fiscal year.

(Read more: Why gold will tank in 2014: Goldman Sachs)

Kospi slips 0.1%

South Korean shares bounced between gains and losses in choppy trade but larger losses were capped as exporters benefited from a stronger Japanese currency. Both Hyundai Motor and Samsung Electronics rose over 1 percent each.

Korea Electric Power (KEPCO) rallied over 3 percent after announcing that it expects to make a profit for 2013, its first in six years, thanks to self-rescue efforts.

The benchmark Kospi also got a boost from data that showed December exporters rose an annual 7 percent, which indicated that the nation's economic recovery was underway.

(Read more: How 2014 could be quite different from 2013

India down 0.5%

Indian shares posted modest losses ahead of the release of December wholesale price inflation data.

By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC

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