Most Asian stock markets opened the trading week with a tumble on growing fears over a prolonged war in Iraq and the rapid spread of a severe respiratory disease in Asia. Global concerns gripped Asian share markets Monday, with almost all major markets ending sharply lower.
Japanese stocks suffered their largest fall in five months on Monday, with the Nikkei 225 Average falling 3.7 percent to close at 7,972.
Monday marks the last day of Japan's fiscal year, and the third year in which Japanese stocks have declined. The Nikkei has lost 28 percent of its value this year and has been trading at its lowest level in two decades. Some analysts say worries over the U.S. led war in Iraq and how long it will last are raising fears about the American economy, and its ability to absorb exports from Japan and other Asian nations.
Kazuhiko Nagami is a director at Okasan Securities in Tokyo and spoke about the market on Monday on TV Tokyo. Mr. Nagami warns that further stock market declines could follow if economic data due later in the week shows that the Iraq war is already affecting the economy.
In other Asian markets, fears over Severe Acute Respiratory Syndrome, or SARS, also hurt investor sentiment.
Aviation and tourism shares across the region have been particularly hard hit as tourists cancel travel plans to avoid China, Hong Kong, Singapore and Vietnam, where the potentially deadly disease has been most prevalent. Carriers such as Cathay Pacific Airways and Singapore Airlines closed lower, as did hotel stocks such as Shangri-la Asia.
In Hong Kong, the Hang Seng Index slumped 2.6 percent to 8,634. Singapore's Staits Times Index lost 3.8 percent. The index finished at 1,267 points. Taiwan's TWSE index shed 3.5 percent to 4,321.
Among the hardest hit Taiwan stocks were China Airlines, which relies on its highly profitable Hong Kong route. The stock lost seven percent, as did shares of EVA Airways, its main competitor.
South Korea's Kospi index dropped 3.7 percent to 535. Electronics companies, which generate a significant amount of their sales in the United States, led the decline on Iraq war concerns. Samsung Electronics fell more than six percent and LG Electronics lost more than three percent.
Indexes in New Zealand, the Philippines and China were among the few in the Asia-Pacific region to close the day in positive territory.