CNBC Asian Markets Tumble Sharply, Greenback Rises (Update2)

South Korea's KOSPI ended down 4.1 percent to hit a three-month low with financials, crude refiners and auto issues under pressure. The won dropped over 2 percent to hit a fresh 11-year low against the dollar on Monday. South Korean exports in February fell 17.1 percent from a year earlier, according to the government. Falls were led by financials, with Shinhan Financial Group and Hana Financial Group both retreating 4.8 percent.

Australian stocks closed down 2.8 percent to their lowest close since December 2003, driven down by the top miners and financials after Moody's revised the rating outlooks of several top banks to negative. Gloomy domestic economic data underlined the risk that Australia's economy was slipping close to a recession, following Friday's news of a sharp U.S. contraction. Australian banks struggled all day and extended losses after Moody's revised its ratings outlook on Westpac Banking, Australia and New Zealand Banking Group and Commonwealth Bank, citing the potential impact of the economic downturn. Westpac led the decline, falling 3.5 percent, no. 3 lender CBA fell 4.3 percent while ANZ lost 1.6 percent.

In markets still trading, Hong Kong shares slid 3.8 percent, with banking and property stocks sold down sharply on increasing worries about the stability of the global financial sector. Shares in HSBC's local arm, Hang Seng Bank were over 4 percent lower ahead of its 2008 earnings announcement later Monday. HSBC was suspended from trade earlier, ahead of what sources said will be a $18 billion rights issue to be announced alongside its 2008 results.

Singapore's Straits Times Index was down 3 percent. Shares of United Overseas Bank, Singapore's second-largest lender, fell six percent to a six-year low on Monday after brokers cut their price targets for the bank following last week's poor earnings result. Credit Suisse downgraded its rating on the bank to "neutral" from its previous "outperform" and cut its target price to S$12.00 from S$14.75.

China's Shanghai Composite Index turned positive after brokerage CLSA's Purchasing Managers' Index (PMI) showed deterioration in the Chinese manufacturing sector slowing. CLSA's PMI rose to a seasonally adjusted 45.1 in February, climbing further from a record low of 40.9 hit in November and gaining from 42.2 in January. The pace of decline in both output and new orders eased. In addition to improvement in economic data, the market is hoping for a formal expansion of China's 4 trillion yuan, two-year economic stimulus plan, which could be announced as soon as this week's annual meeting of parliament. Many analysts think the plan could be expanded to around 6 trillion yuan.