STOCK markets tumbled across Asia on Monday, unnerved by the deepening credit crisis in the United States and a possible unravelling of the yen, as the Japanese currency strengthened against the rapidly weakening greenback.

Dealers said that what is exacerbating the selldown across the region is hedge fund managers offloading Asian equities to buy Japanese yen, as they pay off the massive debts they have borrowed in the Japanese currency because of Japan's extremely low interest rates.

This caused the US dollar to fall by 0.9 percentage point to 110.27 yen. This brings its total fall since last week to about 4.3 per cent, as it sinks to its lowest level against the Japanese currency since May 2006.

Other bloodied bourses include Taiwan whose Taiex Index fell 3.35 per cent and South Korea whose Kospi Index dropped 3.37 per cent, as the sagging US dollar made the goods they export to their largest market, the United States, more expensive.

In Singapore, the benchmark Straits Times Index tumbled 100.26 points to 3499.41, or 3.14 per cent at midday - its single biggest one-day drop since Oct 22.

As expected, the worst hit stocks were regional banks, as investors worry about possible further writedowns in their holdings of debts backed by souring US mortgages.

Hong Kong's HSBC Holdings closed HK$3.90 down to HK$137.10, while Singapore's DBS Group Holdings fell 70 cents to $19.80.

Also badly hit were listed bourse operators as prospects of China allowing its citizens to buy shares overseas dimmed.

The Hong Kong Exchange and Singapore Exchange each fell about 7 per cent to HK$225.40 and S$13.30 respectively.

Still, amidst the gloom, experts are now expecting the US Federal Reserve to give the markets a lift with another interest rate cut when it next meets on Dec 11.

'Like the last Fed meeting, policy makers will not want to disappoint fragile and skittish markets by standing pat if expectations of a rates cut are priced into the futures market.'

'We expect that the Fed will not worry about inflation if the risk of recession in the US has risen dramatically,' said Deutsche Bank Wealth Management's chief Asian strategist, Marshall Gittler.

SINGAPORE
Share prices fell 3.14 per cent in Monday morning trade, tracking heavy falls around the region on worries about the impact of a crisis in the US subprime loan sector, dealers said.

At the close of the early session, the main Straits Times Index was down 109.58 points at 3,490.09.

Among the losers, DBS Group Holdings was 60 cents lower at 19.90 Singapore dollars.

United Overseas Bank also dropped 60 cents, to 19.50.

On Friday, fragile sentiment on Wall Street took a hit after Wachovia, one of the leading US banks, said that its losses from risky real-estate investments may top US$1.5 billion (S$2.17 billion).

'The market is concerned with all these provisions by American banks,' said Leng Seng Choon, an analyst at UOB Kay Hian.

TOKYO
Japanese share prices closed down 2.48 per cent on Monday at a 15-month low, hit by a stronger yen and growing jitters over the fallout from the US subprime loan crisis, dealers said.

But they said shares managed to recover some ground in late trade after plunging below the key 15,000 points level briefly earlier in the day for the first time in almost 16 months.

The Tokyo Stock Exchange's benchmark Nikkei index fell 386.33 points to 15,197.09 by the close, the lowest level since Aug 7, 2006.

The broader Topix index of all first-section shares declined 37.95 points or 2.54 per cent to 1,456.40.

KUALA LUMPUR
Malaysian share prices ended Monday's morning session 1.5 per cent lower amid sharp falls in other regional markets after Wall Street's slump on Friday on continuing credit concerns, dealers said.

The Kuala Lumpur Composite Index was down 20.78 points at 1,381.47, off a low of 1,379.75, on volume of 565 million shares worth 818 million ringgit (S$356 million) while losses led gains 749 to 89 and 146 stocks were flat.

HONG KONG
Hong Kong share prices slid 3.9 per cent by the close of trade on Monday after a Wall Street share price tumble last week fanned concerns about US economic prospects, dealers said.

SHANGHAI
Chinese share prices closed sharply lower on Monday, shedding 2.40 per cent after the central bank announced this year's ninth hike in the bank reserve requirement, dealers said.

They said shares fell across the board with metals and energy stocks leading the declines, while most banks were also lower as investors worried that loan growth would be constrained because of the reserve requirement order.

The measure requires banks to set aside more funds with the central bank.

The Shanghai Composite Index, which covers A and B shares, closed 127.81 points lower to 5,187.74 on turnover of 87.43 billion yuan (S$ 16.9 billion dollars). -- REUTERS, AFP