Asian markets ended mostly lower Thursday as financials slipped on worries over bank earnings, and after a drop in U.S. durable goods stoked concerns the world's top economy is already in a recession. Both Japan and China finished weaker.
Further signs the U.S. economy is flagging, and worries that there will be more bank write-downs after a prominent analyst downgraded four major U.S. banks, were compounded by inflation concerns as oil prices headed higher, and investors took refuge in bonds.
Bank shares, such as Japan's Mitsubishi UFJ and Australia's Babcock & Brown, were among the biggest fallers, following the bank downgrades, a profit warning from Deutsche Bank and comments from European central bankers that there was no end in sight to the global credit
Tokyo's Nikkei 225 Average fell 0.8 percent, with electronic parts maker TDK plunging nearly 8 percent on a newspaper report that it would possibly miss its earnings forecast. Toyota Motor and other exporters lost ground on the firmer yen and concerns about a recession in the United States, a key destination for Asian exports. Gains in oil and commodity prices boosted oil and gas field developer Inpex Holdings and gold and copper producer Sumitomo Metal Mining, helping cushion some of the market's fall.
Seoul stocks closed lower for the first time in seven sessions, with tech shares down after world No.2 memory chipmaker Hynix lost a patent wrangle with a U.S. rival. Hynix and Samsung Electronics fell after a U.S. jury ruled in favor of Rambusover Hynix and other chipmakers, dampening investor sentiment on worries about legal and compensation costs.
Australian shares finished slightly lower, ending two straight days of gains, as financial shares such as Commonwealth Bank of Australia fell on a deteriorating outlook for bank profits. But resource firms such as BHP Billiton and Newcrest Mining continued to rise on stronger metals and oil prices, capping losses.
Hong Kong stocks reversed morning losses and ended 0.2 percent higher with Hutchison and Cheung Kong leading the rise ahead of their earnings, but airlines were under pressure on high oil price. Property group Cheung Kong posted a yearly profit of HK$27.68 billion for 2007, beating consensus forecast of HK$25.86 billion. Ports-to-telecom conglomerate Hutchison said its net profit was at HK$30.6 billion for 2007, compared with consensus forecast of HK$31.91 billion.
Singapore's Straits Times Index also pared back losses, closing 1 percent higher, helped by Ascendas Real Estate Investment Trust after it said that it will book an unrealized revaluation gain of S$483.6 million (US$350.4 million) on its 80 properties.
China's Shanghai Composite Index plunged more than 5 percent to a fresh nine-month low on news of the launch of a sizeable IPO, and after Baoshan Iron and Steel reported disappointing earnings. Baosteel, China's biggest steel maker, announced late on Wednesday that net profit slid 3 percent to 12.72 billion yuan ($1.81 billion) last year -- the first annual fall since 2001. The result was nearly 10 percent below the average forecast of 14.01 billion yuan. Baosteel shares were due to resume trading later on Thursday because of the release of the earnings report.