TOKYO’s main indices plunged nearly 3% on Wednesday as Asian investors reacted to the freezing of three large UK property funds to halt a stampede of investors demanding redemptions.

On Monday, the UK’s largest property fund M&G froze its £4.4bn portfolio. On Tuesday Standard Life lost 5.2% after it suspended trading in its £2.9bn UK real estate fund, and Aviva dropped 3.9% after it froze a £1.8bn real estate investment fund.

On the JSE, UK-focused property groups Intu fell 5.93% to close at R51.55 on Tuesday and Capital and Counties fell 4.67% to R52.50.

A move by the Bank of England to lower the capital requirements of UK commercial banks to stimulate lending helped London’s FTSE 100 gain 0.35%, but other European bourses tumbled on continued fears of an Italian banking crisis.

On Tuesday, the Italian government banned short-selling on Banca Monte dei Paschi Siena whose share price has collapsed 99.7% from a €93 high it reached in July 2007.

Borsa Italiana’s MIB index fell a further 1.45% on Tuesday, the Austrian Traded Index was down 2.72% while Frankfurt’s DAX 30 lost 1.69% and Paris’s CAC 40 fell 1.69%.

The South African Reserve Bank is scheduled to release June foreign exchange reserve figures on Wednesday at 8am. In May they fell to $46.081m from $46.956m in April. Economists expect them to fall to about $45.8m.