Asia: Hong Kong Hammered

In Japan, the Nikkei slumped below 14,000 for the first time in two years, down 138 points, or 1%, at 13,972. Bank shares suffered as investors continued to mull gloomy U.S. data. Sumitomo Mitsui Financial(SMFJY Quote) lost 1.7% to 588 yen, while Mizuho Financial(MFG Quote) shed 1.4% to 503,000 yen, and Mitsubishi UFJ(MTU Quote) declined 1.3% to 999 yen.

Exporters were also hit by a strengthening yen, which rose against the dollar for the fourth straight day. The yen was trading at 107.63 by the end of the Asian trading day vs. 108.16 previously.

Nintendo(NTDOY Quote) dipped 1.7% to 59,000 yen, and Honda(HMC Quote) plunged 4.4% to 3260 yen. Kobe Steel(KBSTY Quote) gave up 0.9%, to 348 yen.

Technology shares were led lower by Yahoo! Japan(YAHOF Quote), which lost 1.3% to 45,950 yen.

A note by Goldman Sachs stated that Japanese stocks tend to reach a floor during or after the worst part of a recession in the U.S. Based on the bank's gloomy forecasts for the U.S., that would mean a bottoming-out of prices around mid-2008.

"However, given [Goldman Sachs'] view that the forecast U.S. recession is likely to be relatively mild by historical standards, and starting valuations for Japanese equities are already at historical lows, the magnitude of further downside for Japanese stocks should be limited," wrote Gavin Parry, a trader for Helmsman in Hong Kong, in a memo to clients.

Parry adds that for long-term value investors, anywhere around the 14,000-point level for the Nikkei may represent a significant buying opportunity, and that recent selling in the market is a process of Japan "playing catch up" with Wall Street's plunge Friday.

In Taiwan, Taiwan Semiconductor Manufacturing(TSM Quote) helped the Taiex, as the stock surged 4.7% to NT$57.50. The Taiex was the only gainer, and rallied 255 points, or 3.1%, to 8428.

The Bombay Sensitive Index in India tracked the Asian selloff, falling 477 points, or 2.3%, to 20,251.