Asian stocks closed sharply lower Monday, pulled down by the financial sector, with fears that the credit crisis is still in full swing returning.
Japan and Australia both shed over 1 percent while South Korea ended a touch weaker.
Financial stocks sagged, extending their decline on worries about the credit market after U.S. financial giant Citigroup said it may suffer up to $11 billion in writedowns for subprime losses. Investors dumped bank counters, sending Japan's top bank Mitsubishi UFJ, Australia's newly listed Macquarie Group, South Korea's Kookmin Bank and Singapore's United Overseas Bank all sharply lower.
Citigroup's announcement comes amid increasing worries about the bank's exposure to the credit markets. The U.S. bank added that its chief executive Charles Prince had resigned, confirming earlier press reports and sending Citigroup's shares 5 percent up in their debud in Tokio.
The writedown is on top of the $6.5 billion that Citigroup wrote off three weeks ago for subprime mortgages, loan losses and other debt. This comes five days after Merrill Lynch ousted its own chief executive, Stanley O'Neal, following an $8.4 billion writedown.