Published 10:02 PM, 19 Dec 2011 Last update 11:49 PM, 19 Dec 2011
Asian shares fell following news that North Korean leader Kim Jong-Il had died, raising geopolitical concerns in the region amid uncertainty over the future of the nuclear-armed nation.
Markets began the day on a low because of worries over the ongoing European debt crisis after Belgium's credit rating was cut, France's outlook was lowered and six other eurozone members were put on downgrade watch.
Seoul closed down 3.43 per cent, or 63.03 points, at 1,776.93, Tokyo shed 1.26 per cent, or 105.60 points, to close at 8,296.12 and Sydney tumbled 2.38 per cent, or 98.8 points, to 4,060.4.
Hong Kong lost 1.18 per cent, or 215.18 points, to end at 18,070.21, Shanghai lost 0.30 per cent, or 6.61 points, to end at 2,218.24 and Taipei fell 2.24 per cent, or 151.76 points, to 6,633.33.
North Korean state television said the 69-year-old Kim died on Saturday and that the isolated communist nation must now follow his son Kim Jong-Un.
Stock markets extended their already deep losses amid nervousness about the future direction of the famine-ridden hermit state, with little known about Jong-Un, who is in his late 20s and considered inexperienced.
"Kim Jong-Il's death is the latest spanner in the works. Although a succession plan was already in place, change means uncertainty and uncertainty is not good for markets," said Stan Shamu, strategist at IG Markets in Melbourne.
South Korea's government went on an emergency footing, the South's Yonhap news agency reported. A meeting of the National Security Council was summoned.
Deputy Finance Minister Choi Jong-Ku said authorities in Seoul would monitor financial markets.
The US dollar jumped to 1,199.00 Korean won after the news of Kim's death, from 1,164.30 before. It later eased to 1,173.60.
And in Japan the government called an emergency security meeting to formulate its reaction.
"Uncertainty is mounting as there are worries over the direction of North Korea and its leadership," Ichiyoshi Investment Management fund manager Mitsushige Akino said.
"Investors are simply in a rush to liquidate their positions," he told Dow Jones Newswires.
On Friday, Moody's Investors Service cut Belgium's credit rating by two notches, citing tough conditions for in-debt European countries to borrow with little chance of a quick end to the eurozone crisis.
The agency reduced Brussels' rating to AA3, with a negative outlook, from AA1.
Fitch Ratings lowered its outlook on France's triple-A rating to negative from stable, saying the debt crisis "constitutes a significant negative shock to the region and to France's economy and the stability of its financial sector".
The agency also placed six eurozone nations, including Spain and Italy, on watch for downgrade, saying it considered a "comprehensive solution" to the crisis was technically and politically beyond reach.
Hiroichi Nishi, general manager of the equity division at SMBC Nikko Securities, said: "Downgrades don't really surprise us these days, but they will still weigh on sentiment."
The dire warnings from the ratings agencies came ahead of a European finance ministers' teleconference on Monday that will aim to fill in details of this month's debt-fighting agreement.
The talks, which will include non-euro members, will also discuss boosting International Monetary Fund (IMF) coffers to enable it to come to the aid of floundering economies.
At the recent summit, which saw Britain block plans for EU treaty change to save the currency, member countries announced plans to pump 200 billion euros ($A262.47 billion) into an IMF warchest.
The euro bought $1.3028 and 101.44 yen in European trade, compared with $1.3032 and 101.37 yen in New York late Friday.
The dollar was also at 77.88 yen, up from 77.81 yen.
On oil markets, New York's main contract, light sweet crude for delivery in January, rose two cents to $93.54 a barrel while Brent North Sea crude for February gained 15 cents to $103.50.
Gold was trading at $1,594.85 an ounce at 1030 GMT, against $US1,590.95 an ounce late on Friday.
In other markets:
- Singapore fell 1.55 per cent, or 41.13 points, to 2,618.09.
Singapore Airlines tumbled 1.65 per cent to Sg$10.14 and DBS Group Holdings eased 2.41 per cent to Sg$11.36
- Manila gained 0.31 per cent, or 13.18 points, to 4,318.12.
SM Investments rose 3.1 per cent to 547.50 pesos and Philippine Long Distance Telephone added 1.5 per cent to 2,534 pesos while BDO Unibank fell 2.7 per cent to 57 pesos.
- Wellington ended 0.69 per cent, or 22.31 points, lower at 3,223.04.
Fletcher Building tumbled 4.1 per cent to NZ$5.92 and Nuplex was down 1.8 per cent at NZ$2.17. Property stock DNZ was up 1.6 per cent at NZ$1.25.
- Kuala Lumpur was 0.79 per cent, or 11.56 points, up at 1,477.78.
Carlsberg Brewery Malaysia fell 2.2 per cent to 8.47 ringgit and Guinness Anchor lost 1.9 per cent to 13.14 ringgit while YTL Corp. added 5.5 per cent to 1.54 ringgit while Gamuda gained 4.0 per cent to 3.12 ringgit.
- Jakarta closed flat, nudging 1.93 points higher to 3,770.29.
Car maker Astra International rose 1.4 per cent to 72,150 rupiah, while Semen Gresik, the largest listed cement producer, rose 4.8 per cent to 10,850 rupiah.
- Bangkok was almost unchanged, dipping 0.51 points to 1,033.55.
- Mumbai fell 0.72 per cent, or 112.01 points, to 15,379.34.
Engineering and manufacturing giant Larsen and Toubro fell 4.06 per cent to 1,032.10 rupees.