Oil & Asian Market drops

November crude-oil futures fell $4.22 to $89.66 a barrel in electronic trading, after losing nine cents to $93.88a barrel Friday on the New York Mercantile Exchange.

In Tokyo, the Nikkei 225 Average ended 4.3% lower at 10,473.09, its lowest close since February 2004. The broader Topix index fell below the psychologically important 1,000-point level to end 4.7% lower at 999.05, a closing level it hasn't seen since December 2003.

"Lots of hedge funds are closing their positions out," said Hiroaki Kuramochi, head of the equities department at Tokai Tokyo Securities in Tokyo. "Some Japanese pension funds are among the buyers, but they don't have enough muscle. There is too much selling pressure."

The benchmark Shanghai Composite dropped 5.2% to 2,173.74, while the Shenzhen All Share index slid 3.8% to 590.91.

In afternoon trading, Singapore's Straits Times index lost 5.6% to 2,168.32 and India's Sensitive Index, or Sensex, slumped 5.4% to 11,855.72, dropping below the 12,000-point level for the first time since September 2006.

The hardest hit was Indonesia's JSX Composite, which tumbled 10% to 1,648.74 in late afternoon trading, as investors who were worried about the global financial crisis panicked after data showed inflation rose to a two-year high in September. That fanned expectations the Southeast Asian nation's central bank will lift interest rates to cool accelerating prices.

The regionwide decline came despite the passage into law of the $700 billion U.S. financial-rescue package last week, as investors worried about the spread of the global crisis to Germany.

Germany on Sunday explicitly guaranteed deposits in banks held by individuals, hours before German officials set up a 50-billion-euro ($68 billion) bailout of troubled commercial property lender Hypo Real Estate to avoid broader damage to Europe's largest economy. (More European bailout stories)

Analysts said there were problem areas within Asia, as highlighted by rising interest rates in the interbank money markets. (Yet to hear on problems in Asia.Coming soon i fear)

The drop came although the People's Bank of China said it will restart a program allowing local companies to issue medium-term notes for share buybacks and other purposes. The move is expected to give non-financial firms access to funds at a lower cost than bank loans. Furthermore, news that the country's securities regulators will soon launch a trial to enable short-selling and margin-lending also failed to support the market.

In Hong Kong, the Hang Seng Index lost 5% to end at 16,803.76, its lowest in more than two years. The Hang Seng China Enterprises Index fell 6.6% to 8, 416.90.

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