Asian markets fell Thursday on gloom about the ability of exporters to weather a widespread economic slowdown, while the U.S. dollar slipped as oil prices rose to above $116 a barrel and halted a rally in the currency.
The U.S. housing market, the source of a financial crisis that threatens to drag all Group of Seven rich nations into a recession, remained a chief concern, as shares of top mortgage finance companies Fannie Mae and Freddie Mac tumbled Wednesday to their lowest in nearly 20 years.
Crude prices rose for a third day after an agreement on a U.S.-Poland missile shield drew a cold response from Russia, the world's second-largest oil producer. Crude edged to above $116 a barrel in the Asian session, adding cost headaches to corporate managers already frazzled by shrinking demand.
Japan's Nikkei 225 Average fell 0.8 percent to its lowest close in nearly five months as worries about the health of the global economy and a firmer yen put pressure on exporters such as electronic parts maker Kyocera. The market's fall was cushioned by gains in energy-linked shares including trading houses and oil and gas field developer Inpex Holdings.
South Korea's KOSPI tumbled 1.8 percent, closing lower for a fourth consecutive session, with tech issues such as LG Electronics and Hynix Semiconductor hit by deepening economy worries, while builders fell on disappointment over new measures aimed at helping the construction industry.
Australian shares shed 1.1 percent as weak outlook statements from companies such as QBE Insurance Group countered advances by the top miners. Babcock & Brown sank 35.65 percent on news that its chairman and CEO had resigned.
Hong Kong shares fell 2.6 percent, wiping out all of the previous session's sharp rally, as investors grew more skeptical about speculation that Beijing will announce a stimulus package for the economy and badly battered mainland Chinese markets. Shares in billionaire Li Ka-shing's flagship Hutchison Whampoa fell 1.3 percent ahead of its earnings announcement today. Sister company Cheung Kong Holdings, also due to announce its first half financial performance today, slid 2.8 percent.
Singapore's Straits Times Index ended 1.4 percent lower. But shares in K1 Ventures soared nearly 10 percent at one point after the investment firm reported a more than doubled full-year net profit and said it would pay a dividend to shareholders.
China's Shanghai Composite Index fell 3.6 percent, led by banks and property shares, after it soared on Wednesday because of hopes for a government stimulus package to boost the economy and aid the stock and property markets. But in a sign that many investors continue to expect official action to aid the stock market, CITIC Securities, the biggest listed brokerage, was up after jumping its 10 percent daily limit Wednesday.