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Asian Stocks End Lower on US Recession Fears

Asian markets closed mostly lower Thursday, on worries about global growth after Goldman Sachs forecast a U.S. recession this year. Both Japan and South Korea closed over 1 percent lower.

Fed Chairman Ben Bernanke is due to give a speech on the U.S. economy later in the session. This, and policy meetings at the European Central Bank and Bank of England later in the day, kept a lid on market movements.

Spot gold was steady at around $882 an ounce, after hitting a record above $891 Wednesday, with strong investor demand underpinning sentiment. Gold and other commodities have started the year around record levels, with investment funds diversifying their portfolios to hedge against declining equity markets amid a credit crunch.

Japanese stocks closed lower, led down by property shares and automakers on worries about the lingering impact of the global credit crunch and the health of the U.S. economy. The Nikkei 225 Average shed 1.4 percent. Bargain-hunting in high tech shares and defensives such as drugmakers kept falls limited, but growing gloom about the economy as seen by a fall in November leading indicators kept investors from active buying.

A man uses his mobile phone in front of electronic stock boards at the Australian Securities Exchange (ASX Ltd.) headquarters in Sydney, Australia.
Ian Waldie | Bloomberg | Getty Images
A man uses his mobile phone in front of electronic stock boards at the Australian Securities Exchange (ASX Ltd.) headquarters in Sydney, Australia.

South Korea's KOSPI finished 1 percent lower as continued concerns over a U.S. economic downturn weighed on exporters such as Samsung Electronics, while POSCO ended flat ahead of its quarterly earnings release after the bell.

Australian shares closed a touch lower, posting a fourth straight day of declines, as jitters about the outlook for global growth wiped out early gains. After opening mostly firmer, the S&P/ASX 200 Index turned negative as banks and the big miners slipped. Shares in Alumina ended down 2.5 percent after falling as much as 6 percent after the company cut its full-year underlying earnings forecast by 17 percent.

Hong Kong stocks dropped after China said it would intervene to brake rising prices in the energy, food and other sectors, with top Asian oil refiner Sinopec the biggest blue chip casualty. Investors also sold European-focused fashion retailer Esprit Holdings, which tracked its European peers after Marks & Spencer issued a profit warning and Germany reported retail sales fell 1.5 percent in November. Shares in local property developers were also hit after a holder was disposing of up to $604 million worth of shares in real estate developer Cheung Kong.

Chinese shares rose fueled by continued strength in metals, agriculture and other resource stocks, on expectations of rising food and energy prices. The Chinese government said on Wednesday it would temporarily intervene in the market to brake rising prices for basic necessities, underlining its concern over mounting inflationary pressures. The news caused shares in Hong Kong-listed Chinese power producers and food companies to fall on fears profits would be capped, but mainland Chinese investors saw it as a reflection of run-away prices.

Singapore's newly revamped Straits Times Index slipped into the red with financial counters weighing on the market, but closed flat.