TOKYO (AP) -- Asian stock markets sank Tuesday, with the benchmark index in Tokyo falling to its lowest point in more than a year after a sharp drop on Wall Street overnight amid jitters about the U.S. banking and housing markets.
Asian markets have been among the world's best-performing this year, but rising defaults in risky U.S. mortgages -- and their impact on the banking industry and overall U.S. economy -- have roiled global financial markets since August.
Investors in Asia are worried about a slowdown in the American economy -- a major export market -- and the unpredictable fallout from the crisis.
In Tokyo, the Nikkei 225 index ended morning trading down 1.9 percent at 14,756.67, its lowest level since July 2006. In Hong Kong, the Hang Seng Index tumbled 3.6 percent to 26,471.47 points in heavy trading by midday.
The Korea Composite Stock Price Index lost 67.49 points, or 3.6 percent, at 1,825.98, after earlier dropping as much as 3.9 percent.
"This fall is a knee-jerk reaction to what happened in Wall Street last night. Investors prefer to either stay on the sidelines or lighten up their exposure," said Jonathan Ravelas, a market strategist at Banco de Oro in Manila, where the Philippine Stock Exchange Index fell 2.9 percent, to end at 3,540.61.
Markets in Australia, Singapore and Malaysia were also down.
The declines followed a sharp drop in U.S. stocks Monday in New York, where the Dow Jones industrial average fell 1.7 percent to 12,958.44.
Investors were unnerved by Goldman Sachs Group Inc.'s downgrade of large banks and its estimate that Citigroup Inc. would have to write down $15 billion due to its exposure to risky debt. U.S. airline, automaker and housing stocks also got hit.
"The market is black and blue all over since sentiment deteriorated further after Goldman Sachs' sell call for Citigroup," said Lee Jae-Hoon, an analyst at Mirae Asset Securities in Seoul.
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