“Jitters over Chinese markets resurfaced after data on inflation, loans and trade boosted speculation.
US Mortgage Bankers Association said delinquencies for all home loans rose to a 3-year high of 4.95010 in Q4”
Global stock markets sell off spread to Asia on Wednesday following steep losses in the US and Europe as signs of trouble in the US housing sector spooked investors.
The falls reversed much of the markets' recent recovery from the worldwide rout that began late last month with a 'slump in Shanghai.
Jitters over the Chinese markets resurfaced after recent data on inflation, loans and trade boosted speculation that the authorities there may be forced to take further steps to cool the booming economy, dealers said.
At the same time, the US housing worries drove the dollar down towards new three month lows against the yen in a setback to Japanese exporters, contributing to a 2.92% slump in Tokyo.
The falls mirrored heavy losses across Asia after the Dow Jones Industrial average dropped 1.97% on Tuesday when data showing rising mortgage delinquencies stoked unease about the slowing Housing sector.
The main European markets opened sharply lower on Wednesday, extending Tuesday's losses.
Dealers said the US housing figures had fanned concerns about a possible credit crunch that could put the brakes on consumer spending in the world's largest economy.
"The sell-off in the local market was due to the correction in overseas markets amid the mortgage loan concerns," said Celestial Asia Securities director Kitty Chan in Hong Kong where shares closed 2.57% lower.
"Bad debts and all these issues could take the market lower still if more (bad) news is uncovered in the near term," she said.
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