Asian markets fall on oil, US worries

Japan's Nikkei 225 index dropped 308.06, or 2.1 percent, to 14,181.38. Singapore's benchmark index closed down nearly 2 percent, while South Korea, Taiwan, Thailand, Malaysia and New Zealand stocks slid well over 1 percent.

Indian shares were hardest hit, with the benchmark Sensex falling as much as 4.4 percent before recovering some. By late afternoon, it was down 3.3 percent at 15,066.10.

Oil prices eased in Asian trading, but investors were still spooked by the 8 percent jump in oil prices on Friday to a record close of $138.54 a barrel. On Monday in Asia, the July contract for light, sweet crude on the New York Mercantile Exchange slipped back to just above $137 a barrel.

"It's anybody's guess where oil prices will go. Nobody can call the price," said Gul Tekchandani, a Mumbai-based investment adviser. "Clearly nobody will venture close to the market. The sentiment is negative."

Investors also fretted about a slump in the U.S. economy--a vital export market--after figures released Friday showed the U.S. jobless rate jumped from 5 percent to 5.5 percent in May, the biggest gain in more than 20 years.

India's index briefly slipped below the 15,000-mark for the first time since mid-March, pulled down by heavy selling in blue chips in the power, banking, oil and gas sectors.

Oil & Natural Gas Corp. or ONGC, sank 5.4 percent. Automobile stocks declined, with Tata Motors Ltd. dropping 5.1 percent and Mahindra & Mahindra Ltd. down 3 percent.

Last week, India cut government subsidies on gasoline, cooking gas and diesel fuel, effectively raising retail prices. The move triggered angry demonstrations in several parts of the country.

In Japan, exporters took a hit, with Canon Inc. dropping 4.4 percent and Toyota Motor Corp. sliding 2.9 percent.