Tokyo - Stock markets across Asia plummeted on Friday, after Dubai World, a government-owned investment company in the Gulf emirate, asked creditors for a six-month extension on debt repayments, raising fears of a financial crisis in the Middle East. In Tokyo, the benchmark Nikkei 225 Stock Average index was down 301.71 points, or 3.22 per cent, to close at 9,081.52, a four-month low, while the broader-based Topix index lost 18.55 points, or 2.24 per cent, to end the week at 811.01.
For Japanese titles, the bad news from the Middle East was compounded by the yen strengthening against the dollar, climbing to a 14-month high.
The Dubai government has authorized the restructuring of Dubai World, which has asked its creditors if it can postpone its payments until May.
This sparked fears of a potential default and questions over the exposure of banking companies to its debt. Consequently, banking titles figured prominently among Friday's losers.
Analysts said the fall in share prices also reflected concerns that the Dubai problem might trigger a wider financial crisis across the Middle East and the Gulf states.
Investors remained jittery as Asian markets logged losses across the board.
"The debt-servicing problems surfacing in Dubai have sent jitters through the markets across Asia, Europe and back home which were deep in the red," said Dinesh Thakkar, the head of Mumbai-based Angel Broking.
In China, the Shanghai SE Composite index was down 2.36 per cent to 3,096.26 and the Shenzen Component index slumped 3.09 per cent, or 411 points, to close at 12,876. Hong Kong's Hang Seng Index fell 1,075.91 points, or 4.84 per cent, to close at 21,134.5, its lowest level for three weeks.
Shares in HSBC Holdings Plc and Standard Chartered Plc fell by more than 7 per cent and 8 per cent respectively amid fears that they may be exposed to the potential financial turmoil in the emirate.
The Dubai debt problem showed the global economic recovery was not stable and might trigger a series of problems if the city state should turn out not being unable to pay the debt, said Guo Tianyong, director of the China Bank Research Center at China's Central University of Finance and Economics.
Global stock markets will continue to suffer impacts from Dubai's debt woes. But China's market is relatively closed and the influences would mostly stay on psychological level," Li Daxiao, an analyst with Yingda Securities was quoted as saying by the official Xinhua nuews agency.
In Taiwan, the TAIEX index closed at 7,490.91, down 248.25 points, or 3.21 per cent.
Shares nosedived on the Seoul stock exchange due to losses in the US market and concerns over the financial crisis in Dubai. The benchmark Kospi index fell 75.02 points, or 4.7 per cent, to close at 1,524.50, while the main index of the technology-heavy Kosdaq market slid 22.15 points, or 4.67 per cent, to 451.67.
Indian stocks recovered some lost ground to close only with comparatively moderate losses, after a sharp slump earlier in the day.
The Bombay Stock Exchange's Sensex index dropped sharply after opening and had slid nearly 4 per cent during afternoon trade. The 30-share index, however, recoverd slightly to close at 16,632.01, a loss of 1.32 per cent, or 222.92 points.
Similarly, the 50-share S&P CNX Nifty of the National Stock Exchange closed at 4,941.75, a loss of 63.8 points or 1.27 per cent.
In Australia, the ASX 200 gave up 136 points, or 2.8 per cent, to 4,572 in a second day of losses.
Stock markets were closed Friday in Singapore, Malaysia, Indonesia and Pakistan.
Dubai markets were also closed Friday for the Islamic holiday of Eid al Adha and will reopen only on Monday.
