Markets pressured by US sell-off

Hong Kong, May 15 : Asian stock markets slumped on Monday, following sharp losses on Wall Street, with major exporters such as Canon Inc. further pressured by weakness in the U.S. dollar.

The dollar was trading near eight-month lows below 110 yen in early Asian dealings. A soft U.S. dollar could erode Asian export competitiveness and cut profits.

At 0025 GMT, Tokyo's Nikkei average <.n225> had dropped 1.51 percent, plumbing its lowest level since March 20, as Sony lost 1.9 percent, Canon slid 2.2 percent and Toyota Motor fell 1.7 percent.

''After the weakness of U.S. stocks at the end of last week and with the stronger yen, I expect that we'll begin with selling here,'' said Yutaka Miura, deputy manager of equity information at Shinko Securities.

But Miura expected a technical rebound to help cut losses by late trade.

Bucking the downtrend, Tokyo Electron rose 1.1 percent after the chip equipment maker reported on Friday its annual profit rose 15.7 percent and forecast further growth this year.

In South Korea, falls of 3.6 percent for top lender Kookmin Bank , 1.5 percent for market heavyweight Samsung Electronics and 2.3 percent for steel maker POSCO drove the key KOSPI <.ks11> down 2.1 percent to two-week lows.

''Right now, currencies are the biggest concern to the Asian markets,'' said Kim Joong-hyun, an analyst at Goodmorning Shinhan Securities.

Also hit, Australia's benchmark S&P/ASX 200 index <.axjo> fell 1.71 percent to one-week lows on weakness in the major banks and the miners, including mining giant BHP Billiton , down 2.9 percent.

Lower oil prices weighed on energy counters such as Woodside Petroleum . U.S. crude was at .85, well down from the .90 a barrel reached last week.

But top construction group Leighton outperformed the wider market, edging a mere 0.4 percent lower after it raised its outlook for annual profit growth to around 20 percent. (See [ID:nSYD285605]) On Wall Street, the blue-chip Dow <.dji> shed 1.04 percent while the tech-laden Nasdaq Composite Index <.ixic> dropped 1.27 percent after a jump in import prices renewed worries about inflation.

Reuters