CNBC Asian Markets Tumble Sharply, Greenback Rises (Update1)

Topics:South Korea | Australia | Stock Market | Singapore | Hang Seng | Nikkei | Shanghai Stock Exchange
By: CNBC.com | 01 Mar 2009 | 07:29 PM ET
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Asian stocks dropped sharply Monday after data last week showed a sharp drop in U.S. fourth-quarter growth, and on worries the U.S. government may need to extend additional help to an ailing financial sector.

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* Dollar Climbs on Safety Buying after AIG
* Oil Falls 2% to Below $44 on Economic Worries
* S&P Ends at 12-Year Low as Citi Stirs Fear
* European Shares Fall; Banks, Pharmas Slide
* Treasurys Mixed as Stocks Hold Ground
* More Asia Pacific News

The U.S. dollar rose broadly after sources said the U.S. government would pour a further $30 billion into embattled insurer American International Group, fueling safety buying of the greenback. The dollar climbed against major currencies other than the yen [JPY-TN 97.45 -0.11 (-0.11%) ], and extended its recent gains against the South Korean won to hit another 11-year peak. The AIG move follows a new rescue plan for Citigroup, adding to fears that more financial firms may need similar rescue plans, analysts said. Oil futures [US@CL.1 43.6 -1.16 (-2.59%) ] fell more than $1 to below $44 a barrel, extending Friday's decline amid fears that the ailing global economy would further damage energy demand.

The Nikkei 225 Average [NIKKEI 7280.15 -288.27 (-3.81%) ] slid 3.8 percent, with Mitsubishi UFJ Financial Group and other banks dropping on concerns about the U.S. financial sector while exporters fell on worry about the U.S. economy. Sony fell 0.48 percent after the company said on Friday that CEO Howard Stringer would double up as president and directly oversee the company's ailing electronics division. Banks skidded, with the banking index down 3.8 percent, after the U.S. government said it would take a large stake in Citigroup's common shares, fanning fears it will increase its role in other major banks.