Asian stocks crumble on Wall Street sell-off

HONG KONG (MarketWatch) -- Asian markets dropped sharply Monday, led by commodity stocks such as Nippon Steel in Japan, BHP Billiton in Australia, Zijin Mining in Hong Kong and Posco in South Korea. The losses came in the wake of a sell-off on Wall Street Friday, when weak jobs data raised concerns the U.S. economy could be heading into a recession. In Tokyo, the Nikkei 225 average declined 1.4% to 14,483.17, after earlier hitting its lowest level since July 2006 at 14,438.61. The index sank 4% during a shortened session Friday. The broader Topix index fell 1.5% to 1,391.30. In Hong Kong, the Hang Seng Index dropped 2.7% to 26,776.46 while the Hang Seng China Enterprises Index lost 3% at 15,433.07. Australia's S&P/ASX 200 gave up 2.4% at 6,155, New Zealand's NZX 50 index shed 1.4% at 3,953.58 and South Korea's Kospi lost 2% at 1,827.71. Singapore's Straits Times Index declined 2.4% to 3,354.33 and Taiwan's Weighted index tumbled 3.7% to 7,915,29, while India's Sensitive Index gave up 0.6% at 20,556.23 in early morning trading. China's Shanghai Composite defied the broad trend and rose 0.1% to 5,367.08. Francis Lun, general manager at Fulbright Securities in Hong Kong, said the local market may recover some of its early losses later in the day, as weak economic data coming out of the U.S. wasn't a big surprise. In a note to clients, Wilson Wong, an analyst with Tai Fook Research, wrote that market activity in Hong Kong was expected to pick up this week, as a majority of investors returned from their New Year holidays. "Volatility will also be on the rise; concerns over economic slowdown in the U.S. and economic-tightening in China would continue to weigh on local equity prices, while expectations of lower interest rates and faster appreciation of the Chinese yuan against the U.S. dollar serve to counter the downward pressure," he added.