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Asian Markets Wobble on Gloomy Economic Outlook

CNBC.com
Friday, 5 Dec 2008 | 6:24 AM ET

Asian markets wobbled Friday in cautious trade following record rate cuts by central banks in Europe, though risk aversion remained, lifting the dollar ahead of what is expected to be dismal U.S. employment data.

Oil prices steadied after slumping $3 on Thursday to their lowest level in nearly four years amid bleak economic data that could spell a deeper decline in global energy demand. Caution was likely to prevail in broader global markets despite the recent selloffs, with concerns also focusing on the fate of U.S. auto makers, which are seeking billions of dollars in government aid.

Japan's Nikkei 225 Average edged down 0.1 percent as investors took profits before key U.S. data, with Mizuho Financial Group and other banks falling on fears about the potential fallout if big U.S. automakers file for bankruptcy. Chugai Pharmaceutical tumbled more than 8 percent, becoming the biggest drag on the Nikkei by
volume weight, after U.S. regulators asked for more data in their review of key rheumatoid arthritis drug Actemra, which is being developed by Chugai's partner Roche.

Seoul shares extended gains to close 2.1 percent higher despite the falls seen on Wall Street, with reports that the government was planning additional economic stimulus measures sending stocks higher. Automakers and steel issues rose, with Hyundai Motor and Kia Motors both advancing. POSCO also rose. Meanwhile shares in Hynix Semiconductor turned around a weaker opening to trade higher on local reports that a top South Korean official said creditor-shareholders of Hynix are considering support for the beleaguered memory chip maker.

Australia's S&P/ASX 200 Index finished down 1.2 percent in a choppy trading session, with materials, energy and consumer staples driving the market down to an eight-day low. But Felix Resources soared 37 percent on short covering after confirming ongoing takeover interest and talks with Yanzhou Coal Mining about a potential A$3 billion bid.

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Hong Kong stocks rose 2.5 percent with investors encouraged to pick up bargains among Chinese financial and property stocks by the mainland government's efforts to stimulate the domestic economy. China Construction Bank gained 2.8 percent while China's biggest lender, ICBC edged up 1.8 percent on hopes China will further cut the reserve requirement on deposits to spur lending

Singapore's Straits Times Index rose 0.9 percent. Financials such as DBS Group advanced.

China's Shanghai Composite Index was 0.9 percent higher and Shanghai Electric Group soared as it listed in Shanghai, suggesting short-term speculators were active in the market.