Asian stocks were weak Tuesday, after more trouble in the U.S. financial sector, including a ninth bank failure, reminded investors of the frail state of the global economy. But both Japan and Australia finished off their session lows.
Worries about world growth were fuelled after the International Monetary Fund trimmed global growth forecasts, bolstering the U.S. dollar and underpinning safe-haven government bond prices.
U.S. crude futures are trading around $115 a barrel for the last few weeks, supported by ongoing tensions with Russia, the world's second-largest crude exporter. The price of oil has become a gauge for Asia's inflation problem and any easing in crude is generally taken as a good sign for Asian economies.
Japan's Nikkei 225 Average finished down 0.8 percent, dragged lower by Canon and other exporters amid growing worry about a spreading credit crisis and gloom over the global economy. Mitsubishi UFJ Financial Group and other financial firms fell after their U.S. peers slid on growing worries about the health of the U.S. financial sector, with thin trading volume exaggerating moves.
Seoul shares closed lower about 0.8 percent lower led by technology issues such as Samsung Electronics, but carmakers and defensive stocks in the telecommunications sector rose.
Australian shares closed down 0.15 percent, well above session lows as bargain hunters
selectively bought oversold stocks such as Australia & New Zealand Banking Group.
Hong Kong shares fell after further worries about the U.S. financial sector stoked fears of a steeper slowdown in the global economy. Shares in China Unicom, the smaller of China's two wireless service providers, fell 6.7 percent to become the biggest percentage decliner on the main index as analysts cut their estimates on the stock, citing the company's aggressive capital expenditure plan.
Singapore's Straits Times Index shed nearly 1 percent to a two-year low after U.S. indexes fell sharply on renewed credit concerns, pushing down stocks across the board. Top lender DBS Group was down 1 percent and bourse operator Singapore Exchange fell nearly 2 percent.
China's Shanghai Composite Index tumbled 2.6 percent in very thin trade, dragged down by brokerage and coal shares, as investors continued to fret about slowing corporate profit growth and weak overseas markets. Brokerage shares, often viewed as an indicator of the outlook for the overall market, led the decline as Hong Yuan Securities slid 7 percent.