Asian Markets Are Sharply Lower, Seoul Sheds 3.3%
Oil and precious metals rose on supply concerns on Monday in thin holiday trade in Asia, while the few stock markets that were open, such as South Korea and Australia, unravelled on fear the credit crunch would spread further.
Oil prices firmed in early Asian trade after soaring 4 percent on Friday, their biggest gain in nearly two months as production problems in the North Sea and Nigeria pushed aside fears that a U.S. recession would hurt fuel demand in the world's top consumer.
With Japan, China and Taiwan closed for national holidays, South Korea and Australia set the tone, with the KOSPI falling more than 3 percent.
South Korea's KOSPI dropped 3.3 percent, catching up with a slide in global markets during last week's holiday, as investors sold banks, shipbuilders and technology shares amid growing worries over the global economy. Kookmin Bank slid 6.45 percent and Samsung Electronics lost 4.73 percent.
Australian shares lost 2.1 percent, as investors sold banks such as National Australia Bank after the Reserve Bank of Australia signaled further interest rate hikes were on the way. Shares rose in companies that beat market expectations with their earnings as the reporting season got underway, though companies that missed estimates got a harsh reception, with engineering services firm United Group tumbling 25 percent. Banking stocks fell on worries that higher interest rates would slow demand for loans, and could also lead to increased bad loan charges. NAB, the nation's top lender by assets, lost 4.3 percent. Commonwealth Bank of Australia, the second-biggest lender, fell 2.8 percent
Singapore's FTSE Straits Times Index was down 1 percent. Financial issues were hard hit with OCBC and UOB shares down over 2 percent.
Hong Kong stocks fell 1.5 percent in subdued trade, as the the market caught up with losses in overseas markets during the Lunar New Year holiday. Property stocks, which have heavy weightings in the Hang Seng Index, were under pressure with Sun Kung Kai Properties and Cheung Kong both losing over 2 percent.