Asian stocks down sharply as Wall St nerves hit home

HONG KONG, March 14, 2007 (AFP) – Asian stock markets closed sharply lower Wednesday, hit by a fresh round of turmoil after Wall Street tumbled overnight on figures showed growing problems in the US housing market, dealers said. They said investors were already wary following their battering earlier this month when a dramatic sell-off in Chinese stocks sparked a massive retreat in markets which had got complacent after a record-breaking run into 2007.

While much of that lost ground had been recovered by early this week, persistent concerns about the outlook for the US economy meant many were fearful there would be a second leg down in an overdue global correction.

A sharp rise in delinquency rates on US mortgages, especially in the riskier sub-prime segment, knocked sentiment badly on Wall Street where weaker-than-expected retail sales data added to the negative tone.

The resulting loss of nearly 2.0 percent in New York set the Asian markets up for a punishing tumble Wednesday — Tokyo shed 2.92 percent, Sydney 2.10 percent, Hong Kong 2.57 percent and Seoul 2.00 percent.

Dealers said the fear now is that the latest reverse could be more serious in weakened markets as investors try to anticipate possible fu