In Hong Kong, the key Hang Seng index lost 383.43 points, or 4.8 per cent, to close at 7,552.77 due to concern over the weak yen and the territory's economy. The Philippine Stock Exchange index lost 64.54 points, or 4.0 per cent, to close at 1,543.07.

"The market is weighed down by uncertainties in the region emanating from Japan, as well as the negative developments here," said Mayenne Katimbang of Magnum International Securities in Manila. Elsewhere, the Australian Stock Exchange's All Ordinaries index shed 30.8 points, or 1.1 per cent, to close at 2,673.8 and New Zealand's NZSE-40 capital index dipped 18.26 points, or 0.9 per cent, to 2,104.04 points. The Taiwan StockExchange weighted price index dropped 23.64 points, or 0.3 per cent, to 7,599.04.

The Jakarta Stock Exchange composite index fell 6.459 points, or 1.3 per cent, to 475.258 and Kuala Lumpur Stock Exchange's 100-share composite index fell 16.38 points, or 4.1 per cent, at 386.27. "It is due to a combination of internal and external factors," said Alex Tang, Research had at Pacific-Core Yamaichi Securities in Hong Kong. He cited wide expectations of poor bank results and renewed weakness of Japanese yen as well as a weaker US market.

The key Hang Seng index on the Hong Kong stock exchange lost 383.43 points to close at a nearly two-moth low of 7,557.54, after a 3.9 per cent loss in previous week's trade. The value of turnover amounted to 4.743 billion Hong Kong dollars (578 million US), against Friday's 3.7 billion dollars.

Dealers said trading was volatile ahead of the release of official growth results for the first quarter, which showed the gross domestic product shrinking by 2.8 per cent in the firstquarter. They also said sentiment was affected by fears of poor interim banking results which proved true.

The government's official gross domestic growth (GDP) figure and HSBC results came after the market closed. Global banking giant HSBC Holdings plc announced a 14 per cent drop in first half pre-tax profits to 3.68 billion US dollars. The bank's net profit came in at 2.4 billion dollars, a drop of 16 per cent over the same period last year.

Carlos Cheung of the Bank of East Asia said the weakening yen was putting increasing pressure on regional currencies, rendering the Hong Kong dollar more vulnerable to speculative attacks. "People think speculators are still active in the market," he added, heightening concerns that interbank rates may continue to trend higher.

European bourses slide on Dow's decline

Mounting concern about the weakening yen and declines in US and Asian shares sent European stocks tumbling on Monday. Leading bourse indexes fell as much as two per cent in early trade asthe yen opened the European session below 145 to the dollar following a sharp fall in Japanese shares. The yen slid to its weakest level in almost seven weeks to stand less than 1-1/2 yen from the near-eight year low it hit in mid-June.

"With more bearish news coming out of Japan, I expect dollar/yen to keep pushing to the upside and target levels of around 147 or 148 this week," said James McKay, chief economist at Commonwealth Bank of Australia in London. London's FTSE 100 index fell 1.4 per cent, hit by a 1.6 per cent fall by the Dow Jones on Friday, dealers said.

Weaker-than-expected results from HSBC Holdings, Britain's largest banking group, added to the gloom over Japan and the White House sex scandal. German shares fell nearly two per cent on the declines in New York and Asia, led by Volkswagen and Dresdner Bank. The Paris bourse's CAC 40 index was also two per cent lower, while markets in Belgium, Spain, Italy and the Netherlands booked falls of between 0.6 per cent and 1.7 per cent.