HONG KONG - Asian stocks tumbled on Tuesday, after Merrill Lynch, the third-largest US investment bank, said it would take a US$5.7 billion (S$7.76 billion) write down related to bad debt, draining confidence in the unstable financial sector.

Coming a day after one of Australia's top banks said it would write down more than US$1 billion in credit-related losses, the news heightening fears that a year-old financial crises that knocked global stocks into bear market has further to run.

Worries that financial sector troubles will further undermine the global economy kept the dollar below Monday's one-month high versus the yen. Gold prices rose for a fourth day and Japanese government bonds surged, pushing the benchmark 10-year yield down to the lowest in three months.

KUALA LUMPUR
Malaysian share prices closed 0.3 per cent lower on Tuesday due to profit-taking, dealers said.

The Kuala Lumpur Composite Index lost 3.29 points to 1,150.80, off an intra-day low of 1,143.55 as mild bargain hunting in government-led companies and selected blue-chips helped narrow losses.

'Profit-taking weighed on the market following declines in regional markets but the late recovery suggests buying momentum may build up tomorrow and lift the broader market', a dealer told Dow Jones Newswires.

Genting fell 1.72 per cent at 5.70 ringgit while top bank Maybank closed flat at 7.55 ringgit.

Telekom Malaysia lost 0.57 per cent at 3.50 ringgit while Tenaga shed 0.60 per cent at 8.30 ringgit. Proton was down 2.5 per cent at 3.08 ringgit.

HONG KONG
Hong Kong share prices closed 1.9 per cent down on Tuesday, following an overnight tumble on Wall Street and surging oil prices, dealers said.

The benchmark Hang Seng Index fell 429.21 points to 22,258.00, on low trading volume of 47.55 billion Hong Kong dollars (S$8.3 billion).

Banks were hit by the US housing and credit-market slump. HSBC was down 1.33 per cent and Bank of East Asia dropped 3.07 per cent.

Cathay Pacific slid 1.96 per cent and Air China slipped 4.32 per cent on higher crude prices.

SHANGHAI
Chinese stocks dropped sharply on Tuesday, led by financial and property shares, in response to major falls in the US and Hong Kong markets as concern about the US credit crisis resurfaced.

The Shanghai Composite Index closed down 1.82 per cent at 2,850.311 points, off an intra-day low of 2,827.697.

Turnover in Shanghai A shares was moderate at 59.2 billion yuan (S$11.8 billion) against Monday?s 64.4 billion yuan. Losing Shanghai A shares outnumbered gainers by 725 to 207.

The Shanghai index retreated from near major technical resistance in the 2,950-2,990 area, where the early July peak roughly coincides with the April low.

TOKYO
Japanese share prices closed 1.46 per cent lower on Tuesday, following heavy losses on Wall Street, where the closure of two regional banks renewed worries about the financial crisis, dealers said. The Tokyo Stock Exchange's benchmark Nikkei-225 index lost 194.33 points to close at 13,159.45. The broader Topix index of all first-section shares fell 19.15 points or 1.47 per cent to 1,281.64.