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Asian Stocks Close Lower on US Concerns

After a volatile trading session, Asian markets ended mostly lower as caution prevailed amid worries about the health of the U.S. economy -- the region's top export destination.

Sentiment took a hit after a survey showed U.S. consumer sentiment fell in November to the lowest in two years. This followed comments from Treasury Secretary Henry Paulson, who told the Wall Street Journal he expects a wave of mortgage defaults next year.

This led to a sharp selloff in the Chinese market. The Shanghai Composite Index was the worst performer in Asia, dropping 4.4 percent to 4,984, sliding past the key 5,000 mark for the first time in three months.

The Hang Seng Index tracked those losses, wiping out its gains earlier in the session to end 2.3 percent lower.

But the selling eased on bargain hunting in Japan, sending Tokyo's Nikkei 225 Average higher at the close after having skidded to a 16-month trough earlier. The broader Topix Index finished slightly lower by 1.3 points lower at 1,437.

climbed 0.87 percent despite reporting a 49 percent drop in first-half profiton Wednesday.

But exporters were not spared the selling on the back of the stronger yen , which hit its highest level against the dollar at 108.30 yen during the session.

Japan Tobacco was also lower by 1.1 percent after it announced plans to launch a $1 billion bid for Katokichi with Nissin Food Products to create the largest frozen food company in Japan. Nissin rose 2.5 percent at the finish line.

In other markets, Australia's S&P/ASX 200 index closed 0.78 percent lower to 6,334 at fresh two-month lows, while South Korea's KOSPI fell below the 1,800 level for the first time since late August after weaving in-and-out of negative territory. It closed 7.97 points lower at 1,799.

In Singapore, shares finished lower as trading was dominated by concerns that Asia's major market for its exports may see a sharp economic slowdown in the face of surging oil prices and a worsening mortage crisis.

The Straits Times Index fell 1 percent to at 3,312. SingTel and DBS Group both fell about 1 percent on news a Dubai investment fund were considering buying stakes in the two companies.