Financials Weigh on Asia, Japan Slides 2.4%
Asian markets fell sharply Tuesday, after a 41 percent quarterly increase in bad loans at Bank of America renewed fears of deteriorating credit, halting a rebound in risk taking.
The financial sector was under fire after the largest U.S. bank greatly increased its reserves for non-performing assets, raising uncertainties about future writedowns at a time when investors are already worried about the results of stress tests on the banking industry.
After the bell on Wall Street, tech giant IBM reported a larger-than-expected fall in quarterly sales, but this was countered by tech bellwether TexasInstruments reporting a small quarterly profit and better-than-expected revenue.
The euro was near a one-month low against the yen and U.S. dollar , with support for the single currency limited ahead of the next European Central Bank meeting on May 7. The retreat from global equities kept pressure on crude futures , with the front month edging down 0.5 percent to $45.65 a barrel after a near 9 percent drop on Monday.
Japan's Nikkei 225 Average closed down 2.4 percent as a stronger yen hit exporters such as Canon. The slide followed a rally of almost 30 percent in the
benchmark average since early March, fueled more recently by optimism about earnings at Citigroup and other U.S. banks. But Toyota Motor closed sharply lower, down 3.8 percent on media reports that its output would drop 12 percent this fiscal year.
Seoul shares ended flat after volatile trade, pressured by losses by financials after weak debt figures from Bank of America, but LG Electronics closed almost 1 percent higher after it released better-than-expected quarterly operating profit results.
Australian stocks fell 2.4 percent, led down by banks and miners, with investors spooked over
bank balance sheets and corporate earnings outlooks. BHP Billiton closed down 4 percent while rival Rio Tinto lost 5.8 percent. But gold miner Newcrest Mining bucked the trend to close 4.5 percent higher.
More From CNBC.com
Hong Kong's Hang Seng Index fell 3 percent in a broad-based sell-off while shares in HSBC slumped after Bank of America reignited concern over credit quality deterioration at global banks. The other index heavyweight, China Mobile slid 5.1 percent after its first-quarter earnings growth slowed to 5 percent, prompting analysts to lower their earnings forecasts on the world's largest wireless service provider.
Singapore's Straits Times Index shed 1.2 percent led by losses in financials such as DBS Group and rigbuilders such as Keppel Corp and Sembcorp Marine.
China's Shanghai Composite Index slipped 0.9 percent in heavy trade, knocked by a drop in financial, energy and metals shares as renewed concerns about the financial crisis weighed on stock and commodities prices overseas.