A plunge in US stock markets has sent Asian shares tumbling on Tuesday.

The battered technology sector was, once again, the worst hit.

The overall tone is shoot first and ask questions later

Cummins Catherwood

The heavy falls come amid renewed uncertainty over the ability of firms to pull themselves out of the cycle of falling profits.

Japan's leading index of shares, the Nikkei, lost 2% of its value, its biggest drop in eight weeks.

And leading indexes in France and Germany also followed the US gloom, both dropping 100 points in morning trade.

"With the fall in Nasdaq and the deepening mistrust over corporate America, there's a cloud over the high-tech sector right now," said Minoru Tada, managing director at World Nichiei Securities.

Credibility questioned

US stocks slumped on Monday after the faith of investors in corporate America was shaken again.

Overnight, the tech-rich Nasdaq index dropped 3.3% to its lowest point in almost eight months.

And the blue-chip Dow Jones index fell 2.2%, its biggest one-day percentage loss in four months.

I throw good economic news at them [investors] and they say: 'So What?'

Larry Wachtel

Industrial conglomerate Tyco plunged 27% after its chief executive, Dennis Kozlowski, quit amid a tax probe.

And shares in energy firm El Paso slumped 14% after a senior executive died in an apparent suicide.

There is no evidence of recent financial wrongdoing, although the company has been accused by federal regulators of abusing its near-monopoly over natural gas to starve Southern California during the 2001 energy crisis.

"The overall tone is shoot first and ask questions later - you see that in Tyco and in El Paso," said Cummins Catherwood, a money manager at Rutherford Brown & Catherwood.

Manufacturing upturn

The atmosphere of mistrust over the credibility of companies overshadowed economic hopes from some strong new indicators.

Manufacturing activity in the United States grew at its fastest rate for two years in May, a closely-watched industry survey found.

" I throw good economic news at them [investors], and they say: 'So What?'," said Prudential Securities' Larry Wachtel.