Asian markets were sharply lower Friday, ending a four-day rally, after bleak U.S. economic data weighed on financials, while a drop in the U.S. dollar against the yen hit exporters such as Toyota Motor.
Data showed sales of existing U.S. homes dropped to a 10-year low, hitting U.S. financial firms, which have been battered by the housing slump, and pulling down the greenback versus the yen.
Higher oil prices also raised concerns about the impact of rising costs
Australia was the hardest hit market, closing down a whopping 3.4 percent to log its steepest fall in six months. National Australia Bank suffered its biggest one-day percentage fall since October 1987, tumbling as much as 14.6 percent, after it raised provisions for its exposure to collateralized debt obligations (CDOs) by a further A$830 million (US$798 million), while falls in base metals prices dented resource firms such as Newcrest Mining and BHP Billiton.
Japan's Nikkei 225 Average ended 2 percent lower while the broader Topix Index gave up 2.6 percent, led down by chip stocks such as Elpida Memory, after rival Samsung Electronics gave a grim outlook for the chip sector.
Canon lost 4.9 percent after it posted a 12 percent fall in quarterly profitin the previous session on sluggish monochrome copier demand and the yen's strength against the dollar.
Seoul shares dropped 1.8 percent on Wall Street's tumble which revived worries about the U.S. housing market slump, while oil's rebound from a seven-week low added to downward pressure.
Shares in Samsung Electronics sank 6.2 percent as it missed earnings estimates in the second-quarter and acknolwedged it was unlikely to achieve a sharp recovery in its third quarter results. Kia Motors fell 1.7 percent as its quarterly operating profit missed estimates.
The markets in China and Hong Kong also traded to the downside as investors locked in gains from the recent rally. China Shenhua Energy's H-shares tumbled 6.7 percent after Beijing announced stricter price controls on thermal coal used by power plants. This dragged the Hang Seng Index down 1.5 percent. The Shanghai Composite Index lost 1.6 percent.
Singapore's Straits Times fell 1.8 percent haunted by growth fears. Chartered Semiconductor declined 5.8 percent despite swinging to a profit in the last quarter but MobileOne outperformed the market, rising 1 percent after posting a slight increase in second-quarter profit.
The Taiwan Weighted Index tumbled nearly 2 percent with AU Optronics leading technology shares lower after the island's top LCD maker forecast lower screen prices and a Wall Street fall raising worries of slowing tech demand.