HONG KONG — Asian stock markets fell Tuesday, with benchmarks in Hong Kong and South Korea off 3 percent or more, as renewed financial fears sent banks across the region tumbling.
Every major market retreated with the previous day's news that Japan's recession deepened amid the global economic downturn still weighing on investors. Crude oil prices fell below $37 a barrel, though the dollar strengthened against the yen.
Banks and insurers were in the spotlight amid concerns there was more pain ahead for the global financial industry.
In Britain overnight, speculation mounted that Lloyds Banking Group might be nationalized after the firm Friday reported larger-than-expected losses at recently acquired Halifax-Bank of Scotland. Meanwhile, the cost of protecting against defaults on bank debt in Japan and elsewhere rose, analysts said.
"The news flow just hasn't stopped being negative about financials," said John Mar, co-head of sales trading at Daiwa Securities SMBC Co. in Hong Kong. "It doesn't seem like we've hit bottom yet."
Japan's Nikkei 225 stock average sank 1.4 percent to 7,645.51, as investors digested news Japan's finance chief was stepping down because of health problems after facing allegations he was drunk at this past weekend's Group of Seven finance ministers' meeting in Rome.
Finance Minister Shoichi Nakagawa, who said he wasn't drunk but groggy from cold medicine, said he will stay on until parliament approves a supplementary budget, probably in April.
Elsewhere, Hong Kong's Hang Seng dropped 3 percent to 13,058.72, and South Korea's Kospi plummeted 4.1 percent to 1,127.19. Markets in Australia, India and Singapore also declined.
In China, where shares have surged in recent weeks on hopes its economy can sustain strong growth, the Shanghai benchmark lost 2.2 percent to 2,335.39.
Among financials, leading Japanese bank Mitsubishi UFJ Financial Group Inc. sank 3.4 percent, while China Construction Bank shed 4.5 percent in Hong Kong.
South Korea's Woori Finance Holdings, which sparked investor worries last week after its banking unit decided against repaying some of its debt early, plunged 7.3 percent.
Wall Street, closed Monday for a public holiday, was to reopen Tuesday. In Europe, Britain's FTSE 100 fell 1.3 percent Monday to 4,134.75, Germany's DAX sank 1.1 percent to 4,366.64, and France's CAC 40 dropped 1.2 percent to 2,962.22.
Oil prices dipped, with light, sweet crude for March delivery falling 76 cents to $36.75 in Asian trade after settling at $37.51 on Friday.
The dollar advanced to 92.48 yen compared to 91.68 yen. The euro traded at $1.2643 from $1.2539.
Asian Stocks Fall On Japan Recession
Copyright The Associated Press