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Asian Markets Slump, Japan Loses 1.5%

Most Asian markets sagged Tuesday, led by financials as news of a possible capital injection at Washington Mutual failed to eliminate concerns about more bank writedowns.

Concerns that the U.S. recession, rising energy and raw material costs, and the credit crunch will hurt company earnings weighed on sentiment. Banks and other financials were pressured by nagging worries about further writedowns. Australia and New Zealand Banking Group fell in Sydney, and Mizuho Financial Group slipped in Tokyo.

Tokyo's Nikkei 225 Average shed 1.5 percent, dragged down by chip-related shares such as Tokyo Electron on a weak industry outlook. Japan's second-largest retailer Aeon posted its biggest daily fall in almost four years as many analysts expressed doubts about the midterm growth plan the firm unveiled after reporting its first profit fall in a decade. Financial shares were also among the hardest hit, including Sumitomo Mitsui Financial amid lingering credit concerns.

South Korea's KOSPI closed down 1.1 percent, led by technology titles whose recent gains on a solid earnings outlook were undermined, as investors opted to lock in profits before parliamentary elections on Wednesday. Chipmakers such as Samsung Electronics fell after Advanced Micro Devices, the world's second largest maker of computer processors, made a first quarter revenue estimate below market expectations, citing the weak economy and adding it will cut its workforce by 10 percent

Australian shares fell almost 1 percent, as concerns about more writedowns dented banks such as Commonwealth Bank of Australia and as investors booked profits in recent outperformers such as Newcrest Mining.

Hong Kong's Hang Seng Index ended 1.1 percent lower, with financial and property stocks leading the declines, as investors locked in profits a day after the benchmark index hit a five-week closing high.

Singapore's Straits Times Index was 1.8 percent lower, with all three major banks, DBS Group, UOB and OCBC on the decline.

But China's Shanghai Composite Index bucked the negative trend, closing 0.4 percent higher, led by shares in brokerages and non-ferrous metal producers in active turnover. Base metal producers outperformed for a second day, led by Aluminium Corp of China, which gained over 4 percent