Despite hefty interest rate cuts by the U.S. Federal Reserve this week, investors were still worried about the health of the U.S. economy and the global ramifications of a slowdown.
Asian markets closed mixed Friday, ahead of the U.S. nonfarm payrolls report, with Japan lower but Australia jumping 3.4 percent.
Global stock markets were roiled by fears this week that a credit downgrade of big bond insurers would further harm the banking sector and stunt the global economy. Wall Street closed higher Thursday, but this couldn't salvage the Dow's worst January since 2000. It was the worst January since 1990 for the S&P 500 Index and the worst January ever for the Nasdaq, down 9.9 percent on the month.
The Nikkei 225 Average ended down 0.7 percent, dragged lower by worries about the U.S. economy ahead of key jobs data and a tumble in Sony shares to a 14-month low after the electronics giant lowered its profit forecast. Additional downward pressure came from Mizuho Financial Group and other banks after Mizuho reported a fall in quarterly profit and slashed its outlook for the second time, prompting HSBC to cut its rating to "neutral" from "overweight".
South Korea's KOSPI finished 0.6 percent higher, with battered shipbuilders such as Hyundai Heavy back in the spotlight on the view recent falls had been overdone, but Hynix Semiconductor fell on a wider-than-expected quarterly loss.
Australian shares closed 3.4 percent higher, up for a second straight day, as miner BHP Billiton and its takeover target Rio Tinto rose ahead of next week's deadline for BHP to make a formal bid. Sharp recent falls also lured investors to bank and property sector stocks, though many remained cautious about the short-term market outlook. Traders were focused on next week's likely bid by BHP for Rio in what would the biggest ever mining takeover. BHP has until Feb. 6 to make a formal offer or walk away for six months, under a deadline set by the UK Takeover Panel.
Hong Kong stocks rose 2.85 percent as gains on Wall Street prompted investors to pick up shares such as mainland lenders and insurers that were knocked down in a two-day selloff. But rate-sensitive Hong Kong property developers slid after local banks lowered their prime rates by 25 basis points, compared to the half-percentage point rate reduction by the Hong Kong Monetary Authority. Blue chips veered into negative terrain at one point as property shares were hit, while tumbling Chinese domestic stock markets also weighed.
Singapore's FTSE Straits Times Index finished less than 1 percent higher. Earlier it dropped into negative territory led by Keppel which fell almost 4 percent after three brokerages cut Keppel's target share price. Keppel, the world's largest builder of offshore oil drilling rigs, posted a 46 percent rise in fourth-quarter net profit on Thursday, but warned that it expects modest growth in 2008.
Chinese stocks closed 1.4 percent lower as concern about damage to the economy from fierce winter weather helped to trigger a fresh sell-off by jittery investors. The market was already bearish after the index tumbled 16.7 percent in January, its second largest monthly drop this decade, so it was vulnerable to speculation about damage to transport, energy and food supplies from heavy snows across central and eastern China in the past week.