Asian markets slide on glum US profit forecasts

Asian markets fell Wednesday, with Tokyo's Nikkei index sliding more than 5 percent, as troubling forecasts from major U.S. companies stoked fears of a severe recession in the world's largest economy.

As credit markets show signs of improving, investors are focusing on the outlook for U.S. economy - a vital export market - and American corporate earnings. The latest concerns emerged overnight as bellwether corporations such as chemical manufacturer DuPont Co., Sun Microsystems and Caterpillar Inc. downplayed their prospects for the coming months.

"The credit crunch seems to be behind us, and we are shifting focus to corporate earnings and economic conditions, and clearly both are deteriorating," said Alex Tang, head of research at Core Pacific-Yamaichi in Hong Kong.

Investors in Asia are also gearing up for earnings season, with Japan's Canon Inc. due to report on Monday and Honda Motor Co. scheduled to release quarterly figures next Tuesday.

All major regional indices were in the red.

Japan's Nikkei 225 stock average sank for the first time in three days, falling 5.6 percent to 8,783 in afternoon trading.

Hong Kong's Hang Seng Index was down 2.8 percent to 14,626, while South Korea's benchmark slid 5.3 percent.

Those same dismal U.S. earnings outlooks also sent oil prices below $70 a barrel as investors shrugged off a looming OPEC production cut. Light, sweet crude for December delivery dropped $2.73 to $69.45 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore.

Oil prices are now less than half of their peak near $150 a barrel in mid-July.

On Tuesday, the Dow Jones industrial average fell 2.5 percent to 9,033.66, while the technology-heavy Nasdaq composite index shed 4.1 percent to 1,696.68. In Europe Tuesday, Britain's FTSE 100 index closed down 1.2 percent at 4,229.73, while Germany's DAX fell 1.1 percent.