Markets decline on credit worries

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There were heavy losses on Asia's major stock markets as investors reacted badly to news that troubled investment bank Bear Stearns, has been sold.

The Nikkei average was down 3.7%, Hong Kong's Hang Seng shed 4% and Mumbai's BSE Sensex fell 3.8%, although most markets recovered from earlier lows.

The dollar fell to 95.72 yen, a 12 year low. The euro hit a record against the dollar, buying $1.5903.

Oil prices rose to another record, with light sweet crude trading at $111.42.

Credit uncertainty

Investor confidence has been it by the trouble at Bear Stearns.

The investment bank was forced to seek emergency funding from the US Federal Reserve last week and was sold within days to JP Morgan Chase.

The quick sale failed to calm investors' nerves who this week will receive earnings announcements from other big US investment banks including Lehman Brothers, Goldman Sachs and Morgan Stanley.

"There is persistent credit uncertainty. Market players have been repeatedly let down which shows the sub-prime mortgage problems are so deep-rooted," said Atsuji Ohara, global strategist at Shinko Securities in Tokyo.

"Just buying an investment bank does not solve the problem," he added.