Asian stock markets fell on Monday after grim news about American consumers sowed more doubts about the strength of the US economic recovery and sent Wall Street tumbling last week. European shares were mixed.
Exacerbating investor worries was US lender CIT Group's bankruptcy filing onSunday, which dragged financials sharply lower across the region.
Japan's key Nikkei 225 stock average led Asian declines, down 231.79, or 2.3 percent, at 9,802.95. Hong Kong's Hang Seng index lost 132.68, or 0.6 percent, to 21,620.19 while Australia's S&P/ASX 200 was down 2.2 percent. South Korea's market dropped 1.4 percent.
Benchmarks in New Zealand, Taiwan and Singapore also fell, though the region recovered some early losses on strength in mainland China. The Shanghai Composite index was the only major market in positive territory, up 2.7 percent on stronger manufacturing figures and higher bank earnings.
As trading got underway in Europe, Britain's FTSE 100 was up 0.1 percent while Germany's DAX was down 0.2 percent and France's CAC-40 was off 0.1 percent.
On Friday, U.S. markets sold off after government figures for September showed personal spending fell 0.5 percent and personal income remained flat compared to the previous month. A drop in a key measure of consumer sentiment added to the day's troubling signs that U.S. consumers, whose voracious spending helped drive global growth before the crisis, were unlikely to resume their spendthrift ways anytime soon.
More bad news followed Sunday with CIT filing for Chapter 11 protection after struggling for months to avert bankruptcy. It was one of the biggest filings in U.S. corporate history, following Lehman Brothers, Washington Mutual, WorldCom and General Motors.
The latest U.S. developments only add to the market's confusion over where exactly the world's biggest economy is headed, analysts said.
"People have been skeptical all along" of the U.S. economy, said Francis Lun, general manager for Fullbright Securities in Hong Kong. "That's why you have these wild gyrations all over, because you have good figures one day and then bad ones the next day."
Financials retreated in the wake of CIT's bankruptcy.
Mitsubishi UFJ Financial Group Inc., Japan's biggest bank, lost 1.2 percent, while brokerage Nomura Holdings Inc. fell 2.1 percent. In Sydney, National Australia Bank Ltd. slid 3.2 percent, while HSBC Holdings was down 1 percent in Hong Kong.
Concerns about the U.S. outlook and the strong yen hit Japanese exporters, including Sony Corp. The issue plunged 5.6 percent, despite the company reporting a smaller-than-expected 26.3 billion yen ($289 million) quarterly loss on Friday.
The Dow fell 249.85, or 2.5 percent, to 9,712.73 on Friday. It ended October with a meager gain of 0.005 percent.
The broader Standard & Poor's 500 index fell 29.92, or 2.8 percent, to 1,036.19, and the Nasdaq composite index dropped 52.44, or 2.5 percent, to 2,045.11.
U.S. markets were headed for a higher open. Dow futures rose 26 points, or 0.3 percent, to 9,690, while S&P futures climbed 3.3, or 0.3 percent, to 1,036.
Oil prices were higher after a big fall, with benchmark crude for December delivery up 22 cents to $77.22 a barrel. The contract dropped $2.87 to settle at $77.00 on Friday.
The dollar rose to 90.10 yen from 89.67 yen late Friday. The euro edged up to $1.4759 from $1.4714.