Tokyo fell 1.3 per cent, Hong Kong tumbled 1.9 per cent, Singapore retreated 3 per cent, Sydney ended down 0.9 per cent, Bangkok lost 1.8 per cent, Jakarta dropped 3.4 per cent and Manila dipped 3.2 per cent. Kuala Lumpur ended barely lower and Seoul barely higher.

Dealers said investors booked profits for a second straight day on recent sharp gains in share prices. Wall Street stocks had closed 0.8 per cent weaker on Tuesday with the Dow Jones Industrials Average down 63.33 points to 7,938.14, hitting sentiment in regional markets, also depressed by a weaker yen.

In Hong Kong, share prices fell on profit-taking that snapped a five-day winningstreak, following the overnight drop on Wall Street and the weaker Japanese unit, dealers said. "The market is in downward trend because of the spectacular rally in last few days. Naturally, there are investors who would like to take in profits.., " said Alex Tang, research director at Pacific-Core Yamaichi International.

The key Hang Seng index lost 168.82 points to close at 8,840.01, a day after breaching the 9,000-point level to hit a near five-month high.

Tokyo: Tokyo stocks closed 1.3 per cent lower dragged down by persistent skepticism over the revival of the banking sector, brokers said. The Nikkei 225 index fell 172.06 points to close at 13,070.73. The Topix index of all first-section issues lost 14.80 points to 984.18.

Investors gave a cold welcome to the lower house passage of bank reform bills which would prop up weak but solvent banks, brokers said. The legislation is expected to clear the lower house on Friday, but there are worries that bad bank loans will not be reduced if banksremain reluctant to use public money in exchange for tough restructuring, brokers said.

A 60 trillion yen ($ 500 billion) fund has been set up to tackle the banking crisis in the world's second largest economy. Along with the domestic problem here, the market was also affected by signs of an economic downturn in the United States, brokers said.

Singapore: Singapore share prices closed 3.0 per cent lower on a persistent bout of profit-taking led by property and banking stocks, dealers said. Despite the selldown, there was some buying in bluechip counters with fresh speculative interest in second liner stocks, they said. A dealer with a European-based brokerage said the market was in a consolidation phase and was "looking a little vulnerable."

A local broker cited rotational play and punting on penny stocks, adding that the upward momentum in the last few days appeared to have petered out. "Much of the rally was due to hedge funds doing short-covering. They seem to be about done with that," hesaid. The benchmark Straits Times index fell 29.86 points to end at 985.78, two days after breaching the 1,000-point level since August. The broader All-Singapore index ended down 5.50 points to 296.51.

Kuala Lumpur: Malaysian share prices closed barely lower in the absence of fresh leads to spur trade. A dealer at a local brokerage said trading was largely listless, marked by a lack of leads. The Kuala Lumpur Stock Exchange composite index shed 0.82 points to end at 384.22, while the lesser second board index rose 0.83 points to 97.85.

Bangkok: Thai shares closed 1.8 per cent down on regional declines with many investors sidelined amid a lack of strong leads, analysts said. Speculative buying in steel stocks and second-liners failed to offset heavy selling in blue chips such as banks and finance firms as the volume was inadequate, they said.

The Stock Exchange of Thailand (SET) composite index fell 5.07 points to 285.12 points, while the select SET 50 shed 0.42 points to close the day at20.31 points.

Jakarta: Indonesian shares closed 3.4 per cent lower on profit-taking following sharp gains in recent sessions, dealers said. A dealer with a local brokerage said the decline came as no surprise after the recent gains. "The sharp rise in the last three days has been extraordinary. It is just logical if the market consolidates," he said. The Jakarta Stock Exchange composite index was down 10.796 points at 303.190.

Seoul: South Korean shares edged up with late retail buying partially off-setting early losses on profit-taking, dealers said. The composite index closed up 0.05 points at 346.13, off a high of 347.96 and a low of 340.03. The yen's reversal after recent gains prompted foreign investors to turn sellers, dealers said.

Shanghai: Shanghai's B shares, nominally reserved for foreign investors, fell 0.6 per cent on profit-taking for a second day running, dealers said. "B shares extended their declines of last afternoon on profit-taking ... Power shares were today'smost active shares," a Goldman Sachs dealer said.