Asian stocks plunged deeper into the red Tuesday, as confirmation of a U.S. recession and further falls in commodity prices dealt blows to exporters and oil producers. Financials also slid on some re-emerging signs of heightened borrowing costs. The surging yen continued to erode Japanese companies' overseas earnings.

Japan's Nikkei 225 sank 5.0% to 7,978.75 points in midafternoon trading, following the lead of the Dow Jones industrial average, which shed 679.95 points, or 7.7%, to 8,149.09 Monday. The National Bureau of Economic Research declared that a U.S. recession started in December 2007. Japanese financials suffered steep losses, as Mizuho Financial Group (nyse: MFG - news - people ) tumbled 7.6%, Sumitomo Mitsui (other-otc: SMFJY - news - people ) lost 6.6% and Mitsubishi UFJ (nyse: MTU - news - people ) slid 6.7%. Nomura Holdings (nyse: NMR - news - people ), which said it aims to reel in 500.0 billion yen ($5.4 billion) in pretax profit and 70.0 billion yen ($749.3 million) in investment banking profit in 2010, fell 7.2%.

Hitachi (nyse: HIT - news - people ) lost 3.5%, after the company and Intel Corporation (nasdaq: INTC - news - people ) jointly announced plans to release solid-state drives, high-end memory storage drives that have no moving parts, by early 2010.

Hurting exporters, the yen strengthened further against the dollar, briefly reaching below 93 yen on the dollar, a five-week low in early trade. Steelmaker JFE Holdings (other-otc: JFEEF - news - people ) plunged 8.6%. Honda Motor (nyse: HMC - news - people ) fell 6.8%.

Hong Kong's Hang Seng index shed 4.8%, to 13,427.95, on steep slides in financials and refiners. The three-month Hibor, or interbank lending rate, climbed to 2.14% from 2.04%. HSBC (nyse: HBC - news - people )tumbled 5.8%, amid reports that the bank plans to raise mortgage rates. Bank of East Asia (other-otc: BKEAY - news - people ) skidded 6.0%. CITIC Pacific (other-otc: CTPCY - news - people ) requested a suspension of trading without giving a reason, after soaring over 15% Monday. In November, the firm had to be bailed out by its state-owned parent company after huge losses from unauthorized forex trading (See "CITIC Pacific's $1.5 Billion Bailout: The Tarnish Remains").

PetroChina (nyse: PTR - news - people ) lost 7.0%, China Petroleum & Chemical Corp., or Sinopec (nyse: SNP - news - people ), shed 6.2% and China National Petroleum Corp., or CNPC, slid 6.0%. In a turnaround from last week, Air China (other-otc: AIRYY - news - people ) dropped 6.0%, as parent companies of its peers China Eastern Airlines (nyse: CEA - news - people ) and China Southern Airlines (nyse: ZNH - news - people ) have received or look likely to receive government aid due to steep fuel hedging losses.

China Unicom (nyse: CHU - news - people ), which last week completed its merger with China Netcom (nyse: CN - news - people ) as part of Beijing's telecom restructuring, sank 5.6%.


Posted by CEOinIRVINE
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