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ASIAN shares fell on Monday, led by banks such as Macquarie after surging United States inflation and high oil prices fanned concerns the Federal Reserve may be unable to make deeper rate cuts to prevent a possible recession.
As market activity began to wind down for the holiday season shares fell across board, with Australia's benchmark stock index down more than 2 per cent. Japanese government bonds slipped and the dollar rose to a 2-month high.
Since August, global financial markets have been rocked by a US subprime mortgage crisis, which has dried up credit.
Central banks around the world have been cutting rates and intervening in money markets to ease some of the worst strains in the financial system. But investors are still extremely nervous.
'On top of the consumption and subprime troubles in the United States, yet another headache, worry over inflation, has emerged,' said Mr Lee Sun Yeop, an analyst at Goodmorning Shinhan Securities in South Korea.
TOKYO
Japanese share prices dropped 0.21 per cent in morning trade Monday, following Wall Street falls on concern that resurgent inflation may limit the scope for further United States interest rate cuts, dealers said.
The Tokyo Stock Exchange's main Nikkei-225 index fell 32.36 points to 15,482.15 by the lunch break.
The broader Topix index of all first-section shares dropped 4.80 points or 0.32 per cent to 1,496.45.
SHANGHAI
Chinese share prices fell 1.64 per cent in early Monday trade, extending last week's overall losses with property and financial stocks leading the decline, dealers said.
They said market sentiment was fragile as investors worried about a slowdown in profit growth amid anxiety over the government's promise to initiate more policy cooling measures to tackle inflation and fast growth.
Weakness in regional bourses also weighed here amid rising concerns that the Federal Reserve would have limited room to cut interest rates further on higher-than-expected US consumer inflation figures.
The benchmark Shanghai Composite Index, which covers both A and B shares, fell 82.28 points to 4,925.63.
HONG KONG
Hong Kong stocks fell on Monday after the latest United States inflation data raised worries that the Federal Reserve may have less scope to lower interest rates, driving shares lower across the board.
China Mobile led the blue chips lower.
The benchmark Hang Seng Index opened at 27,236.45, down 1.2 per cent.
KUALA LUMPUR
The Kuala Lumpur Composite Index opened up 0.37 points to 1,403.78. -- REUTERS, BERNAMA, AFP
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