By Shri Navaratnam And Puja Rajeev
Chinese stocks extended their heavy losses on continued worries that Beijing may unveil more measures to restrain prices.
Hong Kong's Hang Seng Index declined 2% to 23214.46, its sixth loss in seven sessions and its biggest one-day drop since late June. China's Shanghai Composite shed 1.9% to 2838.86, adding to Tuesday's 4% slide. It closed at its lowest level since Oct. 11.
A weakened yen pushed Japanese exporters higher, and the Nikkei Stock Average edged up 0.1% to 9811.66.
Markets in Malaysia, Singapore, Indonesia and India were closed for public holidays.
Commodity-linked shares were hit across the region as worries about the heavy debt load of some European nations, particularly Ireland, reined in investors' interest in riskier assets and pushed the U.S. dollar higher against major global currencies. Copper, zinc, natural rubber and aluminum futures fell sharply on the Shanghai Futures Exchange.
In Australia, the S&P/ASX 200 lost 1.6% to 4624.25, a four-week low. BHP Billiton /zigman2/quotes/208108397/composite BHP +1.11% dropped 2.2% and Rio Tinto /zigman2/quotes/202627887/composite RIO +1.58% sank 3.2%. Among other materials plays, Mitsubishi Materials /zigman2/quotes/201126350/delayed JP:5711 +0.27% lost 4% in Tokyo and Korea Zinc lost 2.9% in Seoul. Jiangxi Copper tumbled 8.2% in Hong Kong and 2.9% in Shanghai, while PetroChina /zigman2/quotes/204979431/delayed HK:857 +0.74% skidded 3.2% in Hong Kong and 1.9% in Shanghai.
Selling continued on worries that Beijing could impose price controls, after the state-run Xinhua news agency cited Premier Wen Jiabao as saying China's Cabinet was drafting measures to curtail sharp increases in prices of commodities that affect people's immediate interests.
In Hong Kong, newly listed Shirble Department Store Holdings, a Chinese company, fell 18% on its first day of trading, pressured by poor market conditions.
Macau gaming stocks tumbled after the city's chief executive, Fernando Chui , said the local government will enhance the regulation of the gaming industry. Shares of Sands China /zigman2/quotes/207609245/delayed HK:1928 +1.21% slid 7.1%, SJM Holdings /zigman2/quotes/203488207/delayed HK:880 -2.56% gave up 6.3% and Wynn Macau /zigman2/quotes/200973447/delayed HK:1128 +3.04% lost 4%.
"While some investors immediately interpret it as tightening, we consider this is always consistent with current practice of the government. In fact, the exact same sentence also appeared in last year's policy address and at the end, the sector has grown 60% year-to-day in 2010," J.P. Morgan analysts wrote in a note to clients.
In Tokyo, Mazda Motor /zigman2/quotes/204777714/delayed JP:7261 +2.40% climbed 3.1%, after the Nikkei reported that about 10 firms have decided to buy a large portion of Ford Motor /zigman2/quotes/208911460/composite F -1.66% 's 11% stake in the Japanese auto maker.