Shares in Asia suffered a fresh bout of sell-off on Friday after the US Senate passed a sweeping regulatory reform bill that could force big banks into a major restructuring.
US, European and Asian shares had already tumbled on Thursday in the wake of Germany’s partial ban on naked short selling and ahead of the crucial US Senate vote on the financial regulation bill. The S&P 500 fell 3.9 per cent on Thursday, bringing its losses since late April to 12 per cent and pushing it into “correction” territory.
Asian shares extended their fall on Friday as fears of a disorderly regulatory crackdown on banks and financial markets triggered a crisis of confidence among investors. In Tokyo, the Nikkei 225 index dropped 2.51 per cent to 9,778.65 in early trading, while Sydney’s S&P/ASX 200 index declined 2.13 per cent to 4,224.70. The Shanghai Composite, the worst-performing market in the region this year, fell 2.23 per cent to 2,498.99. The Hong Kong market is closed for a public holiday.