Asian markets closed sharply lower Friday, with the exception of China and India, as investors sold down shares after report in the New York Times that Merrill Lynch could suffer $15 billion in losses from soured mortgage investments, almost twice its orginal estimate. Japan shed almost 2 percent and South Korea finished 2.3 percent lower.
Defensive play, gold, hit a record high of $898 an ounce, driven by speculative buying, and was trading around $892 in the afternoon session. Gold and other commodities have started the year strongly, with investment funds diversifying their portfolios to hedge against declining equity markets.
Japan's Nikkei 225 Average fell 1.93 percent to its lowest close since November 2005, pushed down by fears about the Japanese economy and the Merrill Lynch report. Retailers and property shares tumbled, with Tokyu Land down over 7 percent, helping to make the real estate subindex the worst performer on the day.