Asian markets under pressure; Nikkei plunges over 6%

Japanese shares slumped more than 6% for a second day on Tuesday, dragging down most other Asian markets as a fresh explosion rocked a stricken nuclear plant in the country's northeast.

The yen was steady against the US dollar despite the sharp sell-off in Japanese stock markets and there were few signs that Japanese insurers were repatriating funds to help pay for the costs of the quake and tsunami that hit on Friday.

The Korean won, attempting a rebound from a three-day losing streak, started stronger but then slipped back to be marginally up. The won was quoted at 1,125.10/40 per dollar.

South Korean shares staged a tepid rally after initial small losses with the index up 0.16% by 0118 GMT. Australian shares were down just 0.55%, a tad weaker than their open and Taiwan and Hong Kong both posted small losses.

"While the quake, tsunami and nuclear power crisis in Japan are bad news from galobal investment perspective, investors are taking a relative and comparative approach on South Korea at this time," said Lee Jun-hyuck, senior fund manager at Dongbu Asset Management in Seoul.

"First off, a lot of Japanese refiners, steelmakers and chipmakers are shut down, and supply of the products is tight. This helps with pricing of products being manufactured by South Korea," he said.

In Tokyo, the broad TOPIX index plunged nearly 7% to below 790, the lowest since April 2009, after posting the biggest decline since the 2008 financial crisis on Monday on record volume.

The blue-chip Nikkei index dropped 6.4% to just below 9,000, driven down by selling in the futures market.

"All focus is on the nuclear crisis. In the situation where the crisis appears to be worsening, foreign investors, domestic fund operators are pulling out from Japanese shares," Hideyuki Ishiguro, a supervisor at Okasan Securities in Tokyo.

Oil and yen steady, Australian miners hit

Oil rebounded from lows triggered by Japan's earthquake due to unrest in the Middle East as Saudi Arabia sent troops into Bahrain to help quell unrest.

US crude for April edged up 11 cents to USD 101.30 a barrel by 0035 GMT, after recovering on Monday from a nadir of USD 98.47, the lowest intraday price since March 1 while Brent crude futures for April delivery fell 14 cents to USD 113.53 a barrel.

The Japanese yen was steady at around 81.80 as the Bank of Japan on Tuesday offered to pump 5 trillion yen (USD 61 billion) into the banking system, continuing its huge fund injection aimed at easing market jitters amid escalating damage from the earthquake.

Shares in Australia took a hit from the country's uranium miners, although many stocks rallied off their lows to post small losses. Paladin shares were down just 0.23% at 0129GMT having opened 3.8% lower, while Energy Resources of Australia, a unit of global miner Rio Tinto fell 1.82%, extending early losses.

In Seoul, nuclear power issues pared early losses. KEPCO Engineering & Construction was down 3.3% after a more than 5% fall at the open.

US Treasury yields fell on Tuesday on the unrest in the Middle East which outweighed fears Japanese insurers would sell to respond to the earthquake and traders in Tokyo said there had been few signs of that so far.

Japan is the second-biggest holder of US government debt.

Benchmark 10-year notes were at 3.37%.