HONG KONG, March 7, 2008 (AFP) - Asian shares tumbled Friday after more bad news out of the ailing US economy about the subprime mortgage crisis, capping a difficult week for regional bourses.

Hong Kong led the fallers among Asia's bigger markets, shedding 3.6 percent, with Tokyo, Sydney and Mumbai also sliding more than three percent. South Korea tumbled two percent while Shanghai, Taipei and Singapore slipped over one percent.

Markets took their cue from Wall Street, which tumbled Thursday as Thornburg Mortgage and a bond fund from the Carlyle Group became the latest to reveal problems with investments linked to US subprime mortgages.

Meanwhile the Mortgage Bankers Association reported that US home foreclosures hit a record level in the fourth quarter, and that those numbers were likely to keep rising.

There were also concerns about the impact of stronger Asian currencies on the region's export competitiveness, and about US jobs data due later Friday.

The subprime default crisis has led to huge losses on investments linked to the home loans and ballooned into a global credit crunch threatening a US-led world economic slowdown.

TOKYO: Japanese share prices tumbled 3.27 percent to a six-week low, hit by a stronger yen and a sell-off on Wall Street where fresh credit market problems rattled investors, dealers said.

The benchmark Nikkei-225 index lost 432.62 points to 12,782.80, the lowest closing level since January 22. The broader Topix index of all first-section shares dropped 39.78 points or 3.09 percent to 1,247.77.

Decliners outnumbered gainers 1,491 to 180, with 51 issues unchanged. Turnover increased to 2.08 billion shares from 1.99 billion Thursday.

Investors were unnerved by falls on Wall Street after US home loan lender Thornburg Mortgage and a Carlyle Group bond fund revealed troubles with investments backed by mortgages.

"Uncertainty over the credit crisis has increased. The case of Thornburg showed that the subprime mortgage mess has unseen implications," said Fumiyuki Nakanishi, chief strategist at SMBC Friend Securities.

Worries about the outlook for domestic corporate earnings also grew.

"Investors seem reluctant to make a fresh move because of the stronger yen and weaker earnings prospects for Japanese companies like Nippon Steel," said Yumi Nishimura, manager for equities marketing at Daiwa Securities SMBC.

The dollar languished close to three-year lows against the yen, falling to as low as 102.46.

Investors kept to the sidelines ahead of the release later Friday of the US employment report for February. "If the jobs data beat the market projection, stocks may get back on the rebound track," Nakanishi said.

Investors were monitoring a potential standoff between the government and the main opposition party over the nomination of Bank of Japan (BoJ) deputy governor Toshiro Muto as the next head of the central bank.

A delay in the appointment of a BoJ chief would "give foreign investors a bad impression," SMBC Friend's Nakanishi said. Nippon Steel shares fell 5.1 percent at 484. Canon lost 2.4 percent at 4,530. Pioneer declined 5.0 percent to 1,151 yen.

Toyota Motor fell 3.3 percent to 5,330 yen. Nintendo declined 5.0 percent to 53,000 and Sony lost 5.1 percent at 4,610.  

HONG KONG: Hong Kong share prices closed down 3.6 percent, dealers said. The Hang Seng index closed down 841.4 points at 22,501.33. Turnover was 83.02 billion Hong Kong dollars (10.66 billion US).

"Confidence in the market is very low at the moment because investors are weighing the impact of a US recession on the global economy," said Castor Pang, strategist at Sun Hung Kai Financial.

Investors were wary ahead of Chinese inflation data, which could lead to more measures to slow the Chinese economy, and key US jobs figures. China Mobile was down 4.2 percent at 110.10 dollars. HSBC dropped 3.4 percent to 117.40 dollars. Sun Hung Kai Properties slid 5.1 percent to 126 dollars. PetroChina slid 4.7 percent to 10.52. Property developer China Overseas Land Investment fell 94 cents to 13.26 dollars.

The Hang Seng index fell 7.5 percent over the week.  

SYDNEY: Australian shares closed down 3.2 percent, dealers said.

The benchmark S&P/ASX 200 index was 171.5 points lower at 5264, while the broader All Ordinaries fell 163 points to 5368.9. Volume was 1.7 billion shares worth 7.0 billion dollars (6.5 billion US).

"There's really nowhere  to hide in this market. All sectors are down," said Marcus Droga, an advisor at Macquarie Private Wealth.

National Australia Bank lost 5.4 percent to 26.93 dollars. ANZ slipped 4.4 percent to 20.26 dollars. Allco Finance Group plunged 16.7 percent to 52.5 cents on a report that 14.2 percent of the company's shares had been seized as collateral for unpaid loans.

Miner BHP Billiton was down 2.3 percent at 38.88 dollars. Rival Rio Tinto shed 3.5 percent to 131.20 dollars.

SHANGHAI: Chinese share prices closed 1.39 percent lower, dealers said. The benchmark Shanghai Composite Index, which covers both A and B shares, fell 60.47 points to 4,300.52 on turnover of 92.20 billion yuan (12.99 billion dollars).

"The market fell today mainly because of the weakness in overseas market, with dual-listed companies dragged down by declines in their Hong Kong-listed shares," said Zhang Gang, an analyst at Southwest Securities.

The Shanghai A-share Index was down 1.39 percent to 4,512.22. The Shenzhen A-share Index shed 1.33 percent to 1,441.66. Ping An Insurance, which is set to raise substantial funds, dragged down the financial sector after plunging 6.52 percent to 67.66 yuan.

"The huge fund-raising exercise would drain market liquidity, with more listed companies rushing to raise funds from the market," said Wang Sai, an analyst at Wanguo Consulting.

China Life Insurance fell 3.96 percent to 37.39 yuan. PetroChina fell 0.70 percent to 22.64 yuan, while Sinopec lost 1.70 percent to 16.18. The Shanghai B-share index fell 1.54 percent to 309.48. The Shenzhen B-share index was down 0.35 percent to 632.73.  

TAIPEI: Taiwan share prices closed 1.47 percent lower, dealers said. The weighted index closed down 127.26 points at 8,531.38. Turnover was 175.01 billion Taiwan dollars (5.68 billion US).

Mega International Investment Services assistant vice president Alex Huang said Friday's fall was not surprising after the market hit a three-month high a day earlier.

"We can't expect Taipei to keep outperforming Wall Street and the others all the time," he said. However, Huang said a scenario favouring a rise in Taiwan's market had not yet faded because the driving force behind recent gains remained intact.

That driving force was the belief that there will be a thaw in economic relations between Taiwan and China after the island elects a new president later in March, he said.

Taiwan Semiconductor Manufacturing Co. was down 0.90 at 64.00 dollars. AU Optronics was up 0.30 at 61.10. High Tech Computer fell 13.00 to 677.00.

SEOUL: South Korean shares closed 2.0 percent lower, dealers said.

The KOSPI index closed down 33.47 points at 1,663.97. Volume was 299 million shares worth 4.3 trillion won (4.49 billion dollars).

A central bank outlook that high raw material prices may slow economic growth helped to hit sentiment, said KimYoung-Jun, an analyst at SK Securities.

Samsung Electronics fell 12,000 won to 550,000 won. Hyundai Heavy slid 11,000 won to 382,000 won. Daewoo Shipbuilding tumbled 2,700 won to 33,300 won.

SINGAPORE: Singapore shares prices closed 1.77 percent lower, dealers said.

The main Straits Times index fell 51.64 points to 2,866.28 on volume of 1.39 billion shares worth 1.67 billion Singapore dollars (1.21 billion US).

"We may see more actions by the Fed if the US credit problem deteriorates further," said Westcomb Securities in a client note.

DBS Group lost 32 cents to 16.68 dollars. City Developments lost 30 cents at 10.80 dollars. Singapore Exchange fell 48 cents to 7.16 dollars.

KUALA LUMPUR: Malaysian share prices closed down 0.3 percent, dealers said.

The Kuala Lumpur Composite Index closed down 3.36 points at 1,296.33. "We are not overly surprised by the KLCI's poor performance of late, given its strong outperformance earlier in the year and uncertainties relating to this Saturday's general election," said Terrence Wong, head of CIMB Research.

The Malaysian market may continue to perform poorly after the polls as the trend is unlikely to turn positive any time soon, Wong said.

Telekom Malaysia fell 2.7 percent to 10.90 ringgit. Bursa Malaysia slipped 1.5 percent to 9.95 ringgit. Palm oil firm Sime Darby fell 0.9 percent to 11 ringgit.

BANGKOK: Thai share prices closed 0.74 percent lower, dealers said.

The Stock Exchange of Thailand (SET) composite index fell 6.14 points to 821.57 and the blue-chip SET-50 lost 4.55 points to 592.18.

"The market today fell, like other markets in the region, because investors feared a recession in the US economy that seems to be approaching," said Pichai Lertsupongkit, senior vice president at Thanachart Securities.

Energy firm PTT remained unchanged at 324.00. Bangkok Bank slipped 1.00 to 128.00. Mobile phone operator Advanced Info Service fell 1.50 to 99.50.

JAKARTA: Closed.

MANILA: Philippine share prices closed 2.8 percent lower, dealers said.

The composite index slid 88.11 points to 3,028.73, its weakest close since January 22.

The broader all-share index fell 45.66 points to 1,859.02. The threat of a US recession is keeping global fund managers on edge, making them "pretty active in swiftly juggling funds from market to market," said Francisco Liboro of PCCI Securities.

Philippine Long Distance Telephone Co. fell 55 pesos to 2,845 pesos.

Metropolitan Bank and Trust Co. tumbled two pesos to 39.50 pesos. Ayala Land Inc. was down 50 centavos at 11 pesos.

WELLINGTON: New Zealand share prices closed down 1.26 percent, dealers said.

The benchmark NZX-50 gross index fell 45.58 points to close at 3,558.26.

"It's a really difficult market at the moment," UBS broker Campbell Stuart said. "Financials in Australia in particular are setting the tone and are just getting absolutely slaughtered."

Fletcher Building plunged 48 cents to 9.32 dollars. Telecom fell four cents to 3.89 dollars. Contact Energy edged up one cent to 8.31.

MUMBAI: Indian shares plunged to close down 3.42 percent, dealers said.

The benchmark Mumbai stock exchange Sensex index fell 566.56 points to 15,975.52.

"After the inflation index reported, the chance of a cut in interest rates in the near-term has reduced," said R.Balakrishnan, executive director at Centrum Broking.

"Companies sensitive to interest and exchange rates fared the worst."

India's inflation rate crossed five percent to hit a 10-month high as fruit, fish and other food prices rose.