Asia stocks sink as layoffs add to global gloom

Asian stock markets sank Tuesday after Wall Street retreated and global financial firms announced another round of massive layoffs, adding to gloom about the world economy. European markets traded lower.

Tokyo's Nikkei 225 stock average fell 194.17 points, or 2.3 percent to 8,328.41, a day after confirmation Japan, the world's second largest economy, had slipped into a recession. Hong Kong's Hang Seng Index shed 4.5 percent to 13,131.23.

Investors were discomforted by news the financial sector, still struggling more than a year after the subprime crisis erupted in the U.S. and spread to Europe, continues to hemorrhage thousands of jobs.

Citigroup Inc. announced overnight nearly 53,000 layoffs in the coming quarters amid massive losses from deteriorating debt tied to bad mortgages. HSBC Holdings PLC, Europe's largest bank by market value, said it plans to cut 500 jobs in Asia due to the global economic slump.

"The entire world seems to be sinking into recession," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. "Everyday there are corporate layoffs and economic bad news. Slowly but surely they are losing hope in markets."

The Shanghai Composite index slid 6.3 percent after advancing four straight days. Australia's main index declined 3.6 percent and South Korea's Kospi fell 3.9 percent.

Benchmarks in Britain, Germany and France were lower in early trading.

The lurch lower followed Wall Street, where traders sold heavily on evidence of more economic weakness and Citigroup's layoffs.

The Dow fell 223.73, or 2.6 percent, to 8,273.58, near its session low. The Standard & Poor's 500 index fell 22.54, or 2.6 percent, to 850.75, and the Nasdaq composite index dropped 34.80, or 2.3 percent, to 1,482.05.

Wall Street futures pointed to a lower open on Tuesday. Dow futures were down 1.1 percent to 8171.

Across the region, investors took the latest financial company layoffs as a signal that more problems are looming in the sector.

HSBC lost 3.6 percent in Hong Kong, and Japanese mega bank, Mitsubishi UFJ Financial Group Inc., tumbled 6.7 percent. China Construction Bank dropped 5.6 percent as investors soured on Bank of America's deal to increase its stake in Chinese company.

Wilting prices for oil, metals and other commodities sent resource companies lower. China's Sinopec Corp. dropped 5.7 percent and Australia's BHP Billiton Ltd., the world's largest miner, retreated 3.6 percent.

Oil prices were lower in Asian trade, with light, sweet crude for December delivery falling 40 cents to $54.55 a barrel in electronic trading on the New York Mercantile Exchange by late afternoon in Singapore.

The contract Monday fell $2.09 to settle at $54.95, the lowest since January 2007. Prices have fallen about 62 percent since reaching a record $147.27 in mid-July.

In currencies, the dollar strengthened to 96.52 from 96.38 and was trading at 1.2608 against the euro.

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