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Asian Stocks End Down as Debt Jitters Return

Asian stocks were under pressure on Friday, surrendering part of the prior session's rally, as investors remained skittish in the face of euro zone debt worries and doubts about the U.S. economic recovery.

Japan's Nikkei averagelost 1.5 percent on Friday, paring earlier losses that took it down more
than 2 percent, though shares with disappointing outlooks such as Sony weighed on the market.

The benchmark Nikkei shed 158.04 points to 10,462.51 after earlier falling as much as 2.2 percent on profit-taking in the wake of a 2.2 percent rise on Thursday.

The broader Topix lost 1.2 percent to 936.45.

Shinsei Bank lost 4.5 percent after it said it had cancelled a planned merger with Aozora Bank that would have created Japan's No.6 bank and after Japan's banking minister called for strong government guidance for the bank.

Sony shares fell 6.7 percent to 2,954 yen after its forecast for annual operating profit fell short of analysts' expectations. The stock had ended the previous day up about 4 percent prior to the earnings news. It forecast an annual operating profit of 160 billion yen ($1.7 billion), up fivefold from a year earlier, but short of a 209 billion yen consensus.

Konica Minolta declined 3.86 percent to 1,070 yen, after the company forecast an annual operating profit of 50 billion yen for the financial year ending in March 2011, up 13.7 percent from the year before but below consensus of 58.1 billion yen.

Other exporter shares also lost ground after helping push up the overall market the previous day.

Canon slid 2.2 percent to 4,045 yen and Tokyo Electron fell 2.8 percent to 5,910 yen. Honda Motor slipped 1.95 percent to 3,015 yen.

Kospi Finishes Flat

Seoul shares ended marginally higher, lifted by gains in autos and POSCO but losses in crude refiners weighed.

The Korea Composite Stock Price Index (KOSPI) finished up 0.06 percent at 1,695.63 points, after falling to 1,677.4 points earlier.

Crude refiners led losses, with S-Oil retreating 3.45 percent and SK Energy down 3.11 percent.

"We have been seeing deterioration of refining margins since April, and recent falls in crude prices are seen pressuring the product prices," said Shin Eun-joo, an analyst at Korea Investment & Securities.

Samsung Life fell 1.3 percent in its third trading day, weighed by foreign net selling, with Credit Suisse and Merrill Lynch top sellers of the stock.

Shares in POSCO ended up 1.53 percent amid news the world's No.4 steelmaker had been picked as the preferred buyer of trading firm and resources developer Daewoo International.

Hyundai Motor rose 2.12 percent to 144,500 won, posting a fresh record closing high and bringing its gains since the start of the year to 19.4 percent.

Affiliate Kia Motors also hit a new record closing high, finishing up 2.41 percent at 31,900 won.

"New product cycle should allow Hyundai Motor and Kia to seize greater share across the globe, along with enhanced brand perception and paradigm shift to value-oriented cars," Citi said in a note dated May 13. Citi raised its target price on Hyundai Motor to 175,000 won and Kia Motors to 40,000 won.

Financials lead Australia Lower

Australian shares dropped 0.9 percent, in the face of euro zone debt worries and after other Asian markets slipped.

Still, the market recorded its first gain in four weeks rising 2.9 percent after a volatile few sessions, following the worst week in over a year last week.

The benchmark S&P/ASX 200 index was down 41.7 points at 4,611.1. The index had rallied 1.7 percent on Thursday.

New Zealand's benchmark NZX 50 index fell 4.8 points to 3,191.

Shares in hospitals operator Healthscope surged to their highest level in 2 years on news it has received a takeover offer that valued the company at A$1.7 billion. A source said Carlyle and TPG had made the offer.

Ramsay Health Care, a rival of Healthscope, rose 2.9 percent on hopes it would also turn into a takeover target.

Shares in Coca-Cola Amatil, Australia's top soft drinks bottler, rose 2.4 percent to A$11.21, after the company reaffirmed its earnings guidance of high single-digit growth for the first half, despite a more frugal consumer.

Top bank shares fell between 1.5 percent and 2.2 percent, with the top two National Australia Bank and Commonwealth bank of Australia leading on concerns Europe's debt crisis might hit their cost of funds.

Techs Drag on Taiex

China shares retreated as investors stayed on sidelines on concerns fresh tightening measures could be launched during weekend.

The key Shanghai Composite Index closed 0.51 percent lower at 2696.6 points.

Taiwan stocks ended flat in cautious trading, amid concerns over the eurozone and poor
outlooks from some U.S. companies, with PC firm Asustek slumping after trimming its revenue forecast.

Tech shares were slightly lower following downbeat comments on the U.S. economy from Cisco Systems and as Sony slumped after its forecast for annual operating profit fell short of analysts' expectations.

The main TAIEX share index inched up 1.56 points or 0.02 percent to 7,772.13, closing this week with a 2.7 percent jump.

Asustek plunged 5.1 percent to its lowest closing level since August 2009.

Hong Kong's Hang Seng declined 1.4 percent to 20,145.4 points.

Ping An Insurance declined over 4 percent at one stage, on news that a TPG unit would sell part of its stake in the company.

Political Violence Weighs on SET

Thailand's benchmark stock index fell 1.20 percent as political violence led to continued foreign selling despite positive corporate earnings.

Violence flared in the capital Bangkok on Friday as troops confronted groups of protesters around a major commercial district following overnight fighting that killed one and wounded nine, including a rogue general.

Singapore's Straits Times Index was 0.4 percent lower and Malaysia's KLCI lost 0.6 percent.