Tokyo - Asian stock markets were in a downward spiral Thursday, tracking overnight losses on Wall Street and falling on persistent worries over a US recession.

The Tokyo stock market extended its losing streak with the Nikkei 225 Stock Average falling 456.87 points, or 5.25 per cent, to close at 8,238.64, a two-week low.

The broader Topix index of all first-section issues was also down 4.31 per cent at 837.53.

Exporters' shares were also hurt by a stronger yen, which reduces Japanese firms' earnings overseas.

Hong Kong shares dropped by more than 5 per cent, as investors dumped stocks following overnight losses on Wall Street and deepening gloom over the economy.

The blue-chip Hang Seng Index fell 717.74 points, or 5.15 per cent, to 13,221.35. Turnover was 51.7 billion Hong Kong dollars (6.67 billion US dollars.)

The closing figures, which took the index to a two-week low, represented a marginal improvement on earlier in the day, when shares plunged by more than 6 per cent in the first minutes of trading.

Thursday's losses were led by shares in Hong Kong-listed Chinese firms which analysts say are being dumped by investors amid growing concerns over the state of China's economy.

The Hang Seng Index has slumped by more than a third since the end of September and has plunged almost 20,000 points from its peak of just below 32,000 points in October 2007.

However, shares on mainland China's two stock markets jumped about 4 per cent, spurred by government economic measures and bucking the downward trend of other Asian markets.

The key Shanghai Composite Index, which tracks shares traded in foreign and local currencies, gained 3.68 per cent to end the day at 1,927.61, up 68.5 points.

Analysts said the surge was mainly caused by investor confidence generated by speculation that the government would introduce more measures to boost economic growth after the announcement Sunday of a package that included 4 trillion yuan (586 billion dollars) for infrastructure projects over the next two years.

The smaller Shenzhen Composite Index rose by 4.15 per cent, or 20.82 points, to close at 522.58.

The Taiwan stock market plunged nearly 4 per cent, with the benchmark Taiex diving more than 5 per cent by mid-session but recovering slightly in later trading and closing at 4,437.83, down 177.74 points, or 3.85 per cent.

Shares also nosedived on the Seoul stock exchange as worries over a global recession persisted.

The benchmark Kospi index plunged 35.42 points, or 3.2 per cent, to close at 1,088.44.

The main index of the technology-heavy Kosdaq market declined 11.69 points to 311.55.

Fears of the country falling into recession dragged Australian stocks down 5.8 per cent.

The ASX 200 gave up 230 points to close at 3,697.

The resources sector was hit hard because of concerns that these Australian companies would suffer as commodity prices fall.

Indonesian stocks dropped 5 per cent, with the Jakarta Composite Index closing at 1,259.71, down 66.91 points.

Singapore stocks fell, but some buying support in the afternoon helped reduced the losses.

The Straits Times Index (STI) closed 1.6 per cent, or 28.54 points, lower at 1,755.47. (dpa)