Taiwan bucked the trend with equities rallying to the news that President-elect Chen Shui-bian had named the incumbent defence Minister as his future premier.

Asian benchmark bond issues weakened in response to a record widening of US dollar swap spreads and instability in key forex and equity markets.

Technology, media and telecommunications (TMT) stocks were the hardest hit around the region and face mounting pressure as a wave of merger activity sweeps across Asia's fast deregulating telecoms markets.

"They have traditionally been government-owned organisations and they are going to have to go through a process of restructuring to adapt to the modern world," Richard Ferguson, regional telecoms analyst with Nomura International told Reuters Television.

Analysts say liberalisation is key to competitive business environments -- especially as the Internet revolution grows.

Singapore opens its telecoms market to full competition on April 1 in an effort to reap the benefits of the expansion of the info-communications revolution and the new economy.

Regulators confirmed on Wednesday they were issuing a slew of new licenses to global and local players. Singapore's move follows that of long-time rival Hong Kong, which extended its liberalisation programme in January. The two sides were now tied in the competitive stakes, Ferguson said, but Japan was still Asia's dominant telecoms market.

"What you've got with Hong Kong and Singapore are two sub-hubs. Really, Japan is the true telecoms hub of Asia just by virtue of the sheer size of the economy."