Asia-Pacific markets sank on Monday as investors focused on growing concerns about a global recession and the lengthening list of banks falling victim to the credit crisis, leaving the passing of the US government's bail-out plan to fade into the background.

The Nikkei 225 dropped to the lowest in four and a half years, losing 4.3 per cent to 10,473.09, while the broader Topix sank to its lowest since December 2003, closing below the 1,000-mark, with a 4.7 per cent drop to 999.05.

Stocks in the Asia-Pacific region excluding Japan had dropped 5.4 per cent, the lowest since December 2005, by mid-afternoon in Asia. The MSCI Asia-Pacific ex-Japan stocks index was on track for the biggest daily decline since January 2008, down 5.3 per cent.

The decline in commodity prices took its toll particularly in Indonesia, where the composite index finished 10.03 percent lower at 1,648.74 points, its biggest one day percentage fall since October 2002 after bomb blasts hit Bali, killing more than 200 people. PT Bumi Resources, coal producer, slid 32 per cent to 2,175 rupiah and PT Astra Agro Lestari, a plantation company, lost 23 per cent to 10,000 rupiah.

"It's absolutely the worst I've ever seen," said one trader. "People are tired, so it's almost not even dramatic anymore when you see the declines. Everyone's still so shell shocked after September and things are still going down."

The decline in US non-farm payrolls announced late last week was the largest decline since March 2003, heightening concerns about a recession in Asia's most important trading partner, while economies in the region are also slowing.

Financials declined across the board as the fallout from the credit crisis showed no signs of abating. The Dutch government nationalised its part of Fortis and the remaining assets were sold to BNP Paribas. Meanwhile, the German government arranged a second bailout package for Hypo Real Estate after the first attempt failed.

In Japan, Mitsubishi UFJ declined 9.2 per cent to Y806 and Mizuho Financial slid 7.8 per cent to Y402,000. In Hong Kong, HSBC declined 2.2 per cent to HK$120.50, Construction Bank of China lost 7.3 per cent to HK$4.45 and ICBC fell 5.3 per cent to HK$4.13.

National Australia Bank lost 2.3 per cent to A$25.55, Macquarie Group declined 10 per cent to A$35.00 and Westpac Banking fell 3.1 per cent to A$22.50.

The yen's surge against the dollar during Asian trading added to the woes of Japan's exporters. Canon lost 4.2 per cent to Y3,680, Sony fell 6.6 per cent to Y2,810 and Nissan dropped 6 per cent to Y584.

Chiba Bank, one of Japan's regional banks, slid 13 per cent to Y473 following a downward revision on its earning forecast by 64 per cent to Y19bn. This was due to losses on foreign bond holdings and its stock portfolio as well as making larger provisions for bad loans as bankruptcies in the domestic real estate and developer sector rise.

The Hang Seng dropped 5 per cent to 16,803.76, its lowest closing since July 2006, while the sub index of mainland Chinese shares traded in Hong Kong declined 6.6 per cent to 8,416.90.

Ping An shares dropped 8 per cent to HK$46.00, following its announcement it would take a loss of Rmb15.7bn ($2.3bn) from its investment in Fortis. Investors on mainland China took a slightly different view, with shares of the company listed in Shanghai gaining 1 per cent to Rmb33.40.

Elsewhere, commodity stocks also declined, which along with the decline in financial shares hurt Australia's S&P/ASX 200 index, closing the day down 3.3 per cent at 4,540.4.

BHP Billiton declined 2.1 per cent to A$29.79, while Rio Tinto declined 5 per cent to A$84.48 and Woodside Petroleum fell 2 per cent to A$49.00.

China's Cnooc, offshore explorer of oil and gas, lost 9 per cent to HK$7.58, while PetroChina, an oil and gas producer, declined 6.7 per cent to HK$7.19. In Japan, trading companies, which have large upstream investments in oil and gas fields, declined on the commodity price falls. Mitsui & Co. fell 7.2 per cent to Y1,114 and Mitsubishi Corp. dropped 5.7 per cent to Y1,827.

Stocks in Pakistan remained stuck as traders have held back from trading. Stocks were little changed, just down 0.01 per cent at 9,178.97, just above the floor of 9,144. Reuters reported authorities would discuss this Friday how long they could keep the floor and would mull ways foreign investors could pull out of the market.

In South Korea, the Kospi dropped 4.4 per cent to 1,358.75, the lowest since January 2007.

Shanghai shares joined the fray after a week-long holiday, declining 5.2 per cent to 2,173.738. The China Securities Regulatory Commission said it would introduce trial margin trading and short selling of shares to develop the stocks markets, despite moves across the globe to curb short selling in the wake of the financial crisis.

In Singapore, shares dropped 5.4 per cent to 2,172.40 on the back of its own economic woes, following reports that the finance minister had warned the economic slowdown there would continue into next year.

There was no let up for Mumbai either, where the Sensex was trading down 5 per cent at 11,905.82.