Asian equity markets tumbled in reaction to the US House of Representatives rejection of a Bush administration’s $700bn bail-out plan for the financial industry while earlier US stocks suffered their biggest fall since the Black Monday crash of 1987.

Financial stocks plunged across the region, leading markets lower. Hong Kong shares dropped as much as 6.1 per cent, the Nikkei in Japan lost 5.0 per cent, and Taiwan, which had been closed on Monday, lost as much as 6.7 per cent. However losses narrowed as the day progressed and Hong Kong, for example, closed with a 0.8 per cent gain. In India, the Sensex was 2.4 per cent higher by mid afternoon in Mumbai at 12,891.82