Asian stocks were mixed on Friday on fears that debt issues at the holding firms behind Portugal's biggest bank could hurt European periphery markets.
The trouble started when Espirito Santo International (ESI), parent of Portugal's Banco Espirito Santo (BES), delayed coupon payments relating to short-term debt securities, sending BES shares plunging 19 percent. A suspension in the stock of the bank's controlling shareholder, Luxembourg-listed Espirito Santo Financial, due to difficulties with ESI also contributed to worries.
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"The question that will come later is: is this an isolated event or is it the first chink in the chain to fire contagion fears. These issues have always been simmering and the data has suggested that normal setting in these economies is still a long way off. However, the fiscal support across the [Europe] region would suggest support will come quickly, but that is unlikely to quell the rush for the exit," said Evan Lucas, market strategist at IG in a note.
Nikkei 0.4% lower
Japanese stocks fell to their lowest since June 30, dropping for a fifth straight session. For the week, the fell nearly 2 percent. A stronger yen was to blame as the safe-haven currency traded near a seven-week high against the dollar, which weighed on exporters.
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Mitsubishi UFJ, Nomura and Fast Retailing were among the index's most actively traded stocks. All three closed down over 1 percent.
Canon jumped over 2 percent after the Nikkei newspaper reported that its operating profit likely rose 10 percent for the April-June quarter.
Shanghai 0.4% higher
Mainland stocks rebounded from one-and-a-half-week lows, thanks to gains in autos.
SAIC Motor rose 1.6 percent and Chongqing Changan Automobile added 4.5 percent after the China Association of Automobile Manufacturers said vehicle sales rose 8.4 percent in the first-half.
The yuan was slightly lower against the dollar after officials agreed to let market forces set the currency's exchange rate when the time is right, at the conclusion of the Strategic and Economic Dialogue.
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ASX 0.4% higher
Australia's benchmark index extended gains into a second session, retreating further from Wednesday's one-week low, thanks to a rally amid banks. Still, the index posted a 0.7 percent fall for the week, snapping three weeks of gains.
National Australia Bank rose nearly 1 percent while Australia New Zealand Banking and Westpac both ended 0.6 percent higher.
ROC Oil increased 3.5 percent after announcing on Thursday that it received a second takeover proposal.
Kospi sheds 0.8%
South Korean shares tracked Asia-wide losses, easing to a two-week low. Samsung Electronics lost nearly 2 percent on reports that one of its Chinese suppliers hired underage workers.
Emerging markets down
India's benchmark Sensex index fell 0.6 percent in choppy trade a day after the government unveiled its first budget that seeks to restore investor confidence and revive economic growth.
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Malaysian stocks finished 0.3 percent lower while the weakened 0.3 percent against the dollar after the central bank hiked its overnight policy rate late on Thursday, as expected.
Indonesia's Jakarta Composite tumbled nearly 2 percent following Thursday's sharp rally.