Asian investors jittery after U.S. bailout rejected

By James Pomfret

HONG KONG (Reuters) - Retail investors from Tokyo to Melbourne kept nervous vigil over their investments and some dumped shares on Tuesday following the shock rejection of the U.S. bailout plan, which sent global equity markets tumbling.

In Australia, stocks fell more than five percent in early trade as brokerages scrambled to deal with spooked investors looking to cut their losses given the bleak outlook.

"I've got an army helmet on my desk and I'm wearing it today, dodging the bullets," said Todd Kerslake, private client adviser at retail broker Shaw Stockbroking in Melbourne.

"We're getting a lot of calls from clients, there are some that are nervous and some that go with the flow."

But some traders noted that the scale of the losses and the mood of investors was nowhere near as dire as the stockmarket crash of 1987, which put global markets into a tailspin.

"This pales into insignificance by comparison," said Stuart Smith, senior private client adviser with Bell Potter Securities, who started as a trader in the 1970s.

In Japan, the Nikkei fell more than four percent to a new low for the year, following a rout in the U.S., Latin American and European stock markets earlier, as investors sought refuge in cash and safer investments, such as gold and government bonds.

Japanese stocks recovered some of their losses, but were still down about three percent in mid-afternoon trade.