Asian equities markets were 1% to 2% lower Wednesday as record oil prices and rising consumer price data in the U.S. discouraged investors.  A rise in crude oil futures to a record of $129.07 overnight in New York sent the Dow down 199.48 points to 12,828.68. The U.S. Labor Department's latest report on inflation provided another cause for investors to abandon stocks, as the core producer price index, which excludes food and energy prices, ticked 0.4% higher, prompting a fresh round of inflation fears. (See: "Producer Inflation Stays Strong -- Or Maybe Not")  The drop on Wall Street darkened the mood in Asia. The S&P/ASX200 Index in Australia was down 0.9% to 5,853.90 while the broader All Ordinaries fell 0.8% to 5,945.10.  Mining stocks led the way to the downside in Australia after Morgan Stanley predicted weaker Chinese demand may lead to softer metals prices in coming weeks. BHP Billiton (nyse: BBL - news - people ) fell 3.3% to 47.02 Australian dollars ($45.13) and Rio Tinto fell 3.1% to 150.12 Australian dollars ($144.09).  Australian financial stocks also fell, with Insurance Australia Group sinking 6.1% to 3.97 Australian dollars ($3.81) after QBE Insurance Group abandoned its $8.3 billion takeover bid for the nation's largest auto and home insurer. QBE Insurance shares were down 1.4% to 25.32 Australian dollars ($24.30). Australia's largest lender, Macquarie, lost 4.5% to 58.48 Australian dollars ($56.11) after the bank warned Tuesday that the challenging credit market would make it difficult to maintain its earnings this year despite posting 23% growth in post-tax profit to 1.8 billion Australian dollars ($1.7 billion) for the previous year.  On the up side, Macarthur Coal soared 13.2% to 20.80 Australian dollars ($19.96) after Arcelor Mittal (nyse: MT - news - people ), the world's largest steelmaker, took a 14.9% stake in the company.  In Japan, the Nikkei 225 Index toppled 2% to 13,880.88 at midday. The broader Topix was off 2.5% at 1,365.26. Exporters saw strong selling with the yen strengthening to 103.31 against the dollar on Wednesday morning. Toyota Motor (nyse: TM - news - people ) went down 3.5% to 5,230 yen while Canon (nyse: CAJ - news - people ) slipped 2.5% to 5,520 yen.  Banking stocks fell in Tokyo after Mitsubishi UFJ Financial Group, (nyse: MTU - news - people ), the country's largest lender, forecast flat profits this year, although a turnaround in its consumer credit unit boosted the bank's fourth-quarter profit by 71%. Mitsubishi UFJ (nyse: MTU - news - people ) fell 3.6% to 1,017 yen ($9.85). No. 2 bank Mizuho Financial Group (nyse: MFG - news - people ) slid 2.8% to 526,000 yen ($5,095) and Sumitomo Mitsui Financial Group fell 2.8% to 835,000 yen ($8,089).  Elsewhere in Asia, Hong Kong's Hang Seng Index dropped 0.8% to 24,959.97 while the Shanghai Composite Index sank 1.7% to 3,385.66. South Korea's KOPSI Index fell 1% to 1,854.01.  Reuters contributed to this article
Weakness overnight in U.S., forecast of softer metals prices and a tepid forecast from Mitsubishi UFJ put investors on back foot.