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Asian shares down after US deal Shares slide despite rescue deal
(about 2 hours later)
Asian shares have fallen with investors remaining cautious despite news of an agreement over a $700bn (£380bn) deal to rescue the US financial system. Shares in Europe and Asia have fallen after news of an agreement on a $700bn (£380bn) US finance sector rescue deal failed to calm investors' nerves.
Analysts said investors were waiting to see how the rescue deal actually starts to work. Confidence was also hit by the part-nationalisation of finance group Fortis, and the nationalisation of UK lender Bradford & Bingley.
In Tokyo, the Nikkei 225 index of leading Japanese shares ended the day down 150 points or 1.3% to 11,744. The main European share markets all fell sharply, with the UK FTSE 100 down 2.5% and Germany's Dax 2.8% lower.
In Hong Kong, the Hang Seng was down 395 points, or 2%, at 18,287 during afternoon exchanges. In Japan, the benchmark Nikkei 225 index closed down 1.3%.
However, news that a US rescue deal was set to be approved boosted the dollar, which climbed strongly against the pound and the euro.
There's a sense that there's a lot more bad news to come Peter Dixon, Commerzbank B&B nationalisedUS rescue deal publishedFortis deal agreed
In early trade in Europe, the euro was down 1.8% against the dollar at $1.4344, while the pound fell 1.9% to $1.8094.
Lack of progress
In the share markets, financial stocks bore the brunt of the falls. In London, Royal Bank of Scotland shares fell 12.9%, HBOS dropped 9% and Barclays was down 6.6%.
Earlier on Monday, the UK Government had confirmed that it was taking over B&B's mortgage portfolio, while the bank's savings business and branches were being sold to Spanish bank Santander.
"There's a feeling abroad that the US (rescue package) was a grudging affair, we were talking about this a week ago and we're not that much further on," said Peter Dixon, UK economist at Commerzbank.
"News that part of the Bradford & Bingley is being nationalised is not helping and there's a sense that there's a lot more bad news to come."
In Germany, shares in Hypo Real Estate plunged 61%. The commercial property lender announced it had struck a deal with a consortium of banks for a multibillion euro line of credit to secure its future.
Shares in Commerzbank fell 21% and Deutsche Bank was 8.4% lower.
In France, the Cac 40 index of leading shares was down 3.3%. Shares in Credit Agricole fell 8.5% and BNP Paribas dropped 7%.
In Hong Kong, the Hang Seng index closed down more than 4%. Investors in Asia remained cautious as they waited to see the detail of the US rescue package.
"Investors want to wait to see how the US plan works," said Yukio Takahashi, market analyst at Shinko Securities."Investors want to wait to see how the US plan works," said Yukio Takahashi, market analyst at Shinko Securities.
"They haven't been able to pass judgement on it yet.""They haven't been able to pass judgement on it yet."