But the index recouped some of its lost ground in a late search for bargains. The Tokyo Stock Exchange's key Nikkei-225 index lost 111.08 points to finish at 15,727.49. It was the lowest close since March 24, 1999, when the Nikkei hit 15,515.47.

On Friday, the index sank below 16,000 points for the first time since May last year. "In morning trade the index fell sharply on follow-through selling over Nasdaq's plunge and a scandal over Financial Reconstruction Commission Chairman (Kimitaka) Kuze," said Nikko Securities Co. Ltd. senior market analyst Kazue Mayuzumi.

"But the index recovered later on bargain-hunting, particularly of high-technology shares," he said.

Hong Kong: Share prices closed 2.0 per cent lower amid renewed fears of interest rate hikes and following the fall in US markets at the end of last week. The key Hang Seng index lost 342.95 points to close at 16,840.98.

The stronger-than-expected US GDP growth of 5.2 per cent in the second quarter revived fears of a rate hike in August. Interest rate-sensitive stocks such as properties and financial stocks were hardest hit while technology and internet stocks continued lower following Nasdaq's decline on Friday and profit warnings at US counterparts.

An institutional sales manager at a regional brokerage said the index appeared likely to trend lower to the 16,000-point level before recovering.

Singapore: Share prices closed marginally higher in quiet trade with most investors sidelined. The Straits Times Index closed 12.19 points or 0.6 per cent higher at 2,051.21, and the broader All-Singapore Equities Index climbed 0.92 points to close at 550.50.

Volume of shares traded dropped to 315.33 million shares valued at 529.41 million Singapore dollars ($304.26 million) down from Friday's 330.76 million shares valued at 514.29 million dollars. The gains were not sustainable, dealers said. "Fund managers were just probably buying so-called defensive stocks like Singapore Press Holdings first," a dealer with a local brokerage said.

Kuala Lumpur: Malaysian shares ended fractionally lower but off earlier lows following late institutional support. The Kuala Lumpur Stock Exchange composite index closed down 0.26 points at 798.83, off a low of 784.95.

Volume was a thin 124.388 million shares worth 402.817 million ringgit ($106 million). Declines led advances 451 to 155. An institutional dealer with a local brokerage said trading was influenced largely by external developments given the lack of local leads.

Seoul: South Korean share prices rose 1.9 per cent on a technical rebound, led by semiconductors. The Korea Stock Exchange index closed up 13.32 points at 705.97. Volume was 218 million shares worth 1.6 trillion won ($1.43 billion). While the index reversed the downward trend on gains by semiconductors, the market remained volatile.

Alstom shares dive almost 15% on cost warning
The price of shares in engineering group Alstom fell almost 15 per cent in Paris on Monday after the company issued a warning over unexpected costs.Alstom, which makes power-generating equipment, said it had encountered problems with its "B" class gas turbines GT24/26 which were likely to lead to "significant extra costs".

The news sent Alstom's shares down 3.5 per cent in initial trading and by early afternoon they were down 14.47 per cent at 26.60 euros, after being briefly suspended from trading twice to allow the market to settle.

The company said the extra costs for the gas turbines would be allowed for in the half-year results to September but would not have a significant effect on a target set by the company to achieve an operating margin of 6.0 per cent in 2002-2003.

The company said that it had detected a new fault and that it would have to modify a part on all of the class "B" turbines, delaying the launch and commercial operation of the GT24B and GT26B turbines.