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Market Update

Asian Shares Off Lows But End Mostly Lower

Asian stocks joined a global sell-off Wednesday as heightened worries about Syria and a potential retaliatory action by the U.S. and its allies dampened sentiment.

Although stocks recovered some of the early losses by the session-end, most of the indexes in the region still finished in the red.

At close, Japan's Nikkei was down 1.5% after hitting a two-month low earlier in the day.

The Shanghai Composite finished down 0.1% while the Hang Seng retreated 1.6%.

Australia's S&P/ASX All Ordinaries closed 1% lower while Mumbai's BSE Sensex staged a dramatic recovery after falling as much as 2.9% earlier in the session to finish up 0.2%.

Stocks in the region had opened sharply lower this morning amid fears the U.S. and its allies were moving closer to a military strike against Syria. According to reports, governments of the U.S., France and Britain were getting ready for an armed response against Syria for "indiscriminate use of chemical weapons" against its civilians.

U.S. defense secretary Chuck Hagel said the U.S. has “assets in place” and forces are “ready to go”, while a British government spokesperson Christian Cubitt told reporters that British forces are making "contingency plans ".

Overnight, Wall Street as well as European markets closed with sharp losses as investors worried about escalating geopolitical tensions. The Syrian conflict has only added to the broad selloff witnessed in recent days amid speculations the U.S. Federal Reserve would start tapering its stimulus measures soon.

Meanwhile, oil and gold prices have jumped to multi-month highs as the ongoing Syrian conflict has prompted investors to flock to safe-haven assets.

Among currencies, the Indian rupee plunged to a new record low of 68.82 against the dollar, but recovered later. Emerging market currencies have been under tremendous pressure over the past few weeks on Fed's tapering worries. The Turkish lira has fallen 14% while Brazil's real has dropped over 17% since the beginning of this year. 

The Indian rupee has slid around 20% against the dollar so far this year. But apart from capital outflow concerns, investors in Mumbai were worried that the recently passed Food Security Bill, aimed at providing cheap foodgrains to the poor, would only add to the country's fiscal deficit; causing a steep fall of 3.13% in the rupee's value today.

Stocks on the Move

Exporters were among the worst performers in Tokyo. Mazda Motor fell 3%, Sony Corp. erased 3.4% and Toshiba Corp. lost around 2%.

Steel players Kobe Steel and JFE Holdings retreated around 2.5% each while brokerage house Nomura Holdings tumbled 3.5%.

The rout extended across the region. In Hong Kong, property developers were worst hit. China Resources Land plunged 3%, Poly Property Group dropped 4% while New World Development declined 2.7%.

Airline stocks also posted deep losses. China Eastern Airlines lost 3.6% while Air China gave up around 3.5%.

Resources added to the losses -- Angang Steel retreated 3.3%, Jiangxi Copper fell 1.8% while oil giant PetroChina dropped 4.1% and China Petroleum & Chemical Corp. slipped 1.4%.

Sydney-listed miners dragged the resource-heavy benchmark index. Index leader BHP Billiton traded down 2.3% while close rival Rio Tinto retreated 2.6%. Fortescue Metals Group slumped over 4%.

In Mumbai, sharp gains in IT stocks, metal and auto firms led to the smart recovery of the 30-share benchmark index. IT services exporters TCS, Wipro and Infosys gained 3.7%, 3.6% and 2% respectively on account of the rupee's weakness.

Other gainers included Jindal Steel, Tata Power, Hindalco Industries, Tata Motors and Tata Steel -- up in the range of 2.5% to 3.5%.