Market Report - Asia Starts Week with Fall

Asia stocks fell sharply on Monday after strong gains made late last week.

Japan's Nikkei tumbled 4 percent (13,088) after posting its biggest one day rally in six years on Friday.

A weak set of Japanese earnings increased fears that a slowing U.S. economy is affecting business.

The world's second-largest steel maker Nippon Steel said its pre-tax profit fell 0.7 percent in the nine months to December.

Despite recent strong growth in many Asian economies, most countries are still highly geared toward exporting products to the United States.

Ben Simpfendorfer is a strategist at Royal Bank of Scotland:

[Ben Simpfendorfer, Strategist, Royal Bank of Scotland]:

"Asia is still heavily leveraged to exports. It's also heavily leveraged to global financial markets and any global financial market turbulence will inevitably spill over into this region and that will have a negative impact on sentiment on consumption and on investment."

China shares were also hurt by the darkening outlook over the global economy.

But Chinese markets took an extra hit as heavy winter snows caused transport chaos and energy supply shortages ahead of the Chinese New Year holiday.

Investors are also concerned that