Asian Markets Tumble as European Debt Fears Grow

Asian Markets plunged Tuesday. Hong Kong's Hang Seng Index plummeted 3.5% to 18,986 and Japan's Nikkei 225 Index tumbled 3.1% to 9,459. In China the Shanghai Composite Index fell 1.9% to end the day at 2,623.

Shares in Hong Kong plunged on fears that the European debt crisis could worsen, dragging the global economy with it. In addition, renewed fears about Chinese measures to cool property prices sent a chill through real estate development companies with interests on the Mainland and Hong Kong. According to a report in the Economic Observer,Shanghai plans a trial property tax beginning next month, reports Bloomberg. New home prices in Shanghai fell 16% last week alone and could signal declines across the country.

Today Hang Lung, whose chairman told Bloomberg he doesn't think there's a bubble in China, dived 5.6%, China Resource Land slumped 4.7%, New World Development tumbled 4.6%, Sun Hung Kai sank 4.2%, China Overseas Land retreated 4%, Henderson Land lost 3.9% and Cheung Kong fell 3.7%. Wharf Holdings, the owner of two of Hong Kong's giant malls, slid 4%. Wharf is the owner of both Times Square, a major shopping destination, and Harbor City, located at the Star Ferry Terminal in Tsim Sha Tsui across the harbor in Kowloon. The enormous mall has two cinemas, acres of high-end boutiques, children's playgrounds and the all-important Toys-R-Us. Located right along the water, the mall has a nautical theme including portholes for windows.

Hong Kong energy companies tumbled, with China Shenhua Energy losing 6.1% of its value and China Resource Power falling 5.5%. Oil exploration company CNOOC nosedived 6.1%, while China Petroleum gave up 3.7%.

Mobile phone maker Foxconn plummeted 9.7%. Yesterday the company, which makes phones for many companies including Apple, said it's seeking help from 2,000 psychiatric experts in an effort to prevent further suicide attempts at its factories where so far this year there have been 10 suicide attempts, reports Bloomberg.

Hong Kong banks took a huge hit today with Bank of Communications dropping 4.8% and China Construction Bank falling 3.5%. HSBC, the most heavily weighted bank on the exchange, lost 2.9%.

In China banking shares also closed lower with China Minsheng falling 3.2%, Bank of China slipping 2.5%, China Construction Bank dropping 2.3% and Industrial & Commercial Bank dipping 1.1%.

Chinese real estate companies lost value today as fears that the government will clamp down further on property speculators were rekindled. Poly Real Estate slumped 4%, China Vanke tumble 3.9% and Gemdale slid 1.6%.

In Japan, a strengthening yen added to woes about the fallout from the European debt crisis. Camera makers, heavily dependent on export income, plunged with Nikon losing 5.8%, Konica Minolta falling 3.8% and Canon receding 2.7%. Sony, maker of the PS3, slumped 5% while rival Nintendo, maker of the Wii lost 3%, Sharp declined 3% and Casio Computer gave up 2.6%.

Among other manufacturers, PAC Metals, which produces stainless steel for export, slid 5.7% and Mitsubishi Materials, which processes metals including gold, fell 4.9%. Mitsumi Electric, a maker of electronic parts, tumbled 6.1% and JGC Corp., which specializes in industrial and nuclear plants tumbled 5.7%, all heading the same direction as most Japanese equities today.