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Market Update

Sensex Dives 3.2%; Sydney, Shanghai Off Early Lows

Asian markets divereged sharply in a broadly downbeat session Tuesday as investors fretted about a possible military action against the Syrian government by U.S. forces.

Mumbai's Sensex was the worst performer of the day, tumbling 3.2% as sharp decline in the Indian currency's value put an additional pressure on the already fragile sentiment.

Among other losers, Japan's Nikkei lost 0.7% and Hong Kong's Hang Seng finished down 0.6%.

China's Shanghai Composite and Australia's S&P/ASX All Ordinaries, however, managed to pare initial declines and ended up 0.3% and 0.1% respectively.

Asian stocks opened lower this morning following a negative lead from Wall Street, where stocks shed early gains after U.S. secretary of state John Kerry said that was little doubt that Syria used chemical weapons against rebels, and further added that the ones responsible must be held accountable for it.

Kerry added the U.S. government was in talks with Congress and allies as to what action should be taken against the Syrian government for the "indiscriminate use of chemical weapons".

Worried about a potential military strike against Syria, investors seemed to have taken a cautious approach amid geopolitical tensions flared by the Syrian conflict.

Among currencies, the Turkish lira plunged to a record low against the dollar amid ongoing geopolitical uncertainties in the region.

The Indian rupee, meanwhile, extended its downslide and hit a fresh record low of 65.72 against the dollar. Most of the emerging market currencies have been under tremendous pressure over the last few days as speculations are rife the U.S. central bank would pull back its easy money policies as soon as next month.

On the other side, Japanese yen gained ground earlier in the session as investors flocked to the relative safety of the currency.

Stocks on the Move

Most exporters in Tokyo ended below the flatline amid the yen's relative strength as compared with its global peers. Among the rare gainers, Sony Corp. enhanced 2.8%, Panasonic Corp. added more than 2% and Nintendo Co. was up 1.1%.

McDonald's Holdings Co. (Japan) Ltd. improved 1.2% after the company appointed Sarah Casanova as the new chief executive officer of the fast-food chain's core unit.

ANA Holdings Inc. said it would acquire a 49% stake in Asian Wings Airways, but shares of the firm finished 0.5% lower.

Tokyo Electric Power bounced back after yesterday's slide, surging around 13% after the operator of the Fukushima nuclear plant said it would seek advise of foreign experts on how to deal with the water leakage at the nuclear power plant.

In Hong Kong, resources firms moved lower despite data showing profits at industrial companies gained 11.6% from a year ago in July.

Angang Steel plunged 3.8% while Jiangxi Copper lost 1.3%. Gold miner Zijin Mining Group added over a percent as gold prices continued to tick higher.

Property firms and exporters were also in the red, along with banks.

Financial plays in Mumbai were among the top losers on the 30-share benchmark Sensex index.

HDFC Bank slumped over 8%, HDFC erased 7.5%, SBI declined 2.4% while ICICI Bank  fell 3.3%.

Among other losers, BHEL tumbled 9.5%, NTPC lost around 6%, Jindal Steel dropped 5.7% and L&T declined 5.3%.

Sydney-listed banks, on the other hand, ended mixed. NAB added around 0.4% while Commonwealth Bank gained 1.2%, but Westpac Banking slipped 0.2% and ANZ finished flat.

Miners were also listless. BHP Billiton Plc. added 0.1% while Rio Tinto slipped 0.1%. Gold miner Newcrest Mining added 0.3% on account of higher international bullion prices.