Asia-Pacific shares on Monday wiped most of the gains they made last week as investors digested the possibility that the US government might allow one of the world’s biggest car makers, General Motors, to go bust.

The Nikkei in Japan dropped 4.5 per cent to record its worst day for two and a half months. Hong Kong’s Hang Seng lost 4.7 per cent – its biggest fall for three weeks. Taiwan shares were down 3.4 per cent, and in South Korea the market dropped 3.2 per cent.