Asian markets plunge on US economic concerns

Investors dumped stocks after an overnight sell-off on Wall Street and on news that Citigroup Inc. had lost nearly US$10 billion in the fourth quarter as it wrote down mountains of bad mortgage assets - the latest fallout from the credit crisis. Weak U.S. retail sales figures also added to the gloom.

"American financial mismanagement has brought us to this economic meltdown," said Francis Lun, a general manager at Fulbright Securities in Hong Kong. "Asian stock markets are all suffering; nobody has escaped."

In Hong Kong, the benchmark Hang Seng index sank 5.4 percent to 24,450.85, while Tokyo's Nikkei 225 index fell 3.4 percent to close at 13,504.51 points, its lowest in more than two years.

Markets in Australia, China, India, South Korea, New Zealand and the Philippines also dropped sharply on worries about slower growth in the U.S. and uncertainty about the extent of the subprime mortgage crisis.

Concerns about the U.S. financial system were also felt in the currency market, which sent the U.S. dollar below 106 yen, its lowest since May 2005.

Investors saw more damage from the credit crisis when Citigroup said Tuesday it had written down $18.1 billion in bad assets. That help send the Dow Jones industrial average down 277 points, or 2.2 percent, to 12,501.11.

"The fallout from the Citigroup result is significant, with many saying ... there is more bad news to come," said Trent Muller, an ABN Amro Morgan analyst in Sydney. "We will see a bit of panic selling with a lot of investors taking cash off the table today."

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