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Asian Markets Finish Lower on US Recession Fears

Asian markets closed lower Friday, with investors spooked by fresh evidence that the U.S. economy is in recession. Japan and South Korea both closed 1 percent lower.

Concern that the world's top economy was seriously flagging was heightened after the Philadelphia Fed reported that its gauge of regional factory activity fell to minus 24 in February from an already weak minus 20.9, which had been its worst reading since the 2001 recession.

Economists had expected a slight bump up in the gauge to minus 11. In addition, U.S. crude oil futures dropped on news that supplies rose by 4.2 million barrels, almost twice as much as expected, and as billionaire investor Boone Pickens told CNBC he was short-selling the commodity and expects prices of oil and natural gas to fall up to $15 a barrel in the second quarter.

Japan's Nikkei 225 Average closed 1.3 percent lower as weak economic data fed worries about a U.S. recession and spooked investors, with Canon and other exporters down as the yen gained ground. But the exporter weakness and a tumble by mobile carrier KDDI were met by gains in metals firms including Toho Zinc, which extended its Thursday surge on soaring metals prices and kept the market from sliding further.

The government lowered its assessment of Japan's economy for the first time in 15 months and cautioned against rising risks from a slowdown in the U.S. economy, its major export destination.

It also revised down its assessment of exports and industrial output, the brightest spots in the world's second-largest economy, in a monthly report.

South Korea's KOSPI finished down 1 percent, dragged down by exporters after the latest U.S. economic data pointed towards possible recession, while steelmaker POSCO dropped after announcing a delay in starting its new India plant. Samsung Electronics, the world's top memory chipmaker,
declined 2 percent. POSCO fell 2.76 percent.

Australia's S&P/ASX 200 Index shed 0.4% as fresh worries of a U.S. recession unnerved investors, while persistent credit market jitters inflicted more pain on battered financial stocks. Weaker-than-expected earnings at firms including oil refiner Caltex Australia also weighed on the market. More losses for banks such as National Bank of Australia and Commonwealth Bank of Australia, which have been under pressure amid the credit jitters. But Australia and New Zealand Banking Group bucked the trend, climbing 1.6 percent, having been hit hard earlier in the week.

Hong Kong stocks closed 1.5 percent lower as weak U.S. economic data sparked fears that the world's biggest economy may be in recession, prompting investors to sell across the board. Hong Kong Exchanges and Clearing, one of the morning's top-traded stocks, sank more than 4 percent amid slumping turnover and a broker downgrade.

Singapore's Straits Times Index finished the day 0.2 percent lower with declines across the board. But shares in Kim Eng Holdings jumped almost 20 percent to a 7-month peak after Mitsubishi UFJ Securities offered to buy 11 percent of its shares. Mitsubishi UFJ said in a statement that it will pay S$2.70 per Kim Eng share, representing a premium of 34 percent over the Singapore stockbroker's last traded price of S$2.02 a share. The deal could cost the Japanese broker $118 million.

China's Shanghai Composite Index plunged 3.5 percent, as selling pressure intensified after the index dropped below the 4,466 point level which many analysts consider important technical support. Pudong Development Bank and Sinopec continued to weigh on the market. Pudong tumbled over 7.5 percent, leaving it down 20 percent in the past three days. It has been sliding since news emerged of its plan to raise as much as 40 billion yuan ($5.6 billion) through a stock sale, and its weakness is continuing to hurt banking stocks in general.