Asian stock markets were pummelled again on Friday, with sharp declines across the region following more bad news out of the United States over the subprime mortgage mess.
Tokyo fell 3.3 per cent to a six-week low, Australian shares closed down 3.2 per cent and Hong Kong had shed 2.8 per cent by the lunch break, as investors dumped shares after a string of gloomy reports about the US credit crunch.
"There's really nowhere to hide in this market," said Marcus Droga, an advisor at Macquarie Private Wealth in Sydney. "All sectors are down."
Markets took their cue from Wall Street, which tumbled overnight as Thornburg Mortgage and a bond fund from the Carlyle Group became the latest to reveal problems with US mortgage-related investments.
The bad news deepened when the US Federal Reserve announced that debt on American homes had exceeded equity for the first time since the Fed began tracking the figures in 1945.
Meanwhile the Mortgage Bankers Association reported that US home foreclosures hit a record level in the fourth quarter, and that those numbers were likely to keep rising.
"The market is in shock due to Wall Street's overnight slide, putting most investors on the defensive," said Lee Young-Kon, a Hanwha Securities analyst in South Korea, where the market lost 2.0 per cent.
Adding fuel to the fire, there were concerns about the impact that stronger Asian currencies would have on the region's export competitiveness.
The dollar, which also hit a record low against the euro, flirted with a three-year low against the Japanese yen, which investors were looking to in the face of the stream of bad news coming out of America.
"The market still shows a stereotypical reaction to any fresh news or leads concerning the subprime loan and credit problems and therefore immediately buys into the yen," said Takashi Kudo of NTT Smarttrade in Japan.
With the dollar weakening and crude oil skirting record highs close to 106 dollars a barrel, dealers were anxiously awaiting what could be still more bad news when US jobs data is reported later on Friday.
The February jobs report could show the weakening US housing market and months-long credit crunch having more impact on the labour market, leaving investors with few signs of good news that could spur a rebound.
The Wall Street consensus was for a gain of 25,000 jobs but some analysts have predicted a second consecutive loss after a private sector report said US firms shed 23,000 jobs last month.
Dealers said fears that the United States was headed to recession – or already in it – intensified the gloom on bourses around the region.
Taipei lost 1.5 per cent, Philippine shares shed 2.8 percent and Indian shares were off 3.0 percent at opening. (AFP)
More suffering on Asian stock markets