HONG KONG ? Financial firms bore the brunt of the pain as stock markets tumbled in Asia on Friday after US President Barack Obama said he would crack down on Wall Street's "reckless" big banks.
Regional investors followed the lead of the Dow Jones index, which suffered its worst fall of the year after Obama said he wanted to put limits on banks to avoid a repeat of the financial crisis that sent shockwaves around the world.
Asia's financial centers were hammered, with Hong Kong two percent down in early trade, while Tokyo slumped 2.72 percent, Sydney gave up 1.66 percent and Singapore dropped 1.45 percent.
"Never again will the American taxpayer be held hostage by a bank that is too big to fail," vowed Obama.
The president Thursday unveiled plans to limit "excessive" risk-taking and "protect" US taxpayers by preventing banks or financial institutions from owning, investing in or sponsoring hedge fund or private equity funds.
Blaming the banks for causing the economic crisis, he said: "My resolve to reform the system is only strengthened when I see a return to old practices at some of the very firms fighting reform."
He said he was also galvanized to act "when I see record profits at some of the very firms claiming that they cannot lend more to small business, cannot keep credit card rates low, and cannot refund taxpayers for the bailout."
He vowed: "If these folks want a fight, it's a fight I'm ready to have."
However, his words went down badly in Wall Street, which tumbled 2.01 percent.
The news capped a tough week for the markets, which have broadly been lower on fears that Beijing is set to tighten credit as it tries to rein in its scorching economy.
"People are scrambling to sell because of uncertainty over Obama's banking proposal," said a dealer with a Singapore brokerage. "The China factor of course is still fresh in everyone's mind."
Those worries were stoked on Thursday after Beijing said its economy expanded 10.7 percent in the December quarter, while inflation reached a 13-month high.
Shanghai was 1.08 percent off on Friday.
"We had a weak lead from Wall Street on the potential moves from China to slow things down, and Mr. Obama is going forward on bank regulation," Burrell Stockbroking director Richard Herring said in Sydney.
"We had a good run over the Christmas period, so maybe there's just a little unwinding of some Christmas excess."
Despite the markets' woes, Tiger Airways made its debut on Singapore's stock exchange, becoming the first Asian carrier to list in five years.
The budget airline, which was one of the most actively bought stocks Friday, was at 1.53 Singapore dollars, slightly up from its initial public offering price of $1.50.
The dollar fell to 90.23 yen in Tokyo morning trade from 90.50 in New York late Thursday. The euro rose to $1.4092 from 1.4082 but dropped to 127.15 yen from 127.44.
Oil was also lower, with New York's main contract, light sweet crude for March delivery, dipping 24 cents to $75.84 a barrel, while Brent North Sea crude shed eight cents to $74.50.
Hong Kong gold opened at $1,094.50-1,095.50 an ounce, down from Thursday's close of $1,113.50-1,114.50.
