Asian stocks closed mixed Monday, as investors shrugged off a rash of weak economic indicators to keep most markets afloat. Japan and South Korea closed just a touch higher, which the Hong Kong market fell.
Investors, glued to screens for signs of a U.S. recession that could infect the global economy, saw more evidence that growth in the world's largest economy was slipping.
The Reuters/University of Michigan index of consumer sentiment sent a shiver through the U.S. market as it dropped in February to a level associated with past recessions. And manufacturing in New York contracted this month for the first time in almost three years.
Japan's Nikkei 225 Average ended nearly flat in a market where short-covering waned and prices were buoyed by reassurance from better-than-expected U.S. and Japanese economic indicators last week. Toshiba jumped after a company source told Reuters at the weekend that it planned to abandon its HD DVD format for high-definition video, leaving the field to Sony's rival Blu-ray system.
South Korea's KOSPI erased early gains to end up just 0.1 percent, as steelmaker POSCO cut gains after announcing a big hike in iron ore procurement prices, while exporters slipped following weak U.S. consumer sentiment data. The world's fourth-largest steel maker, gave up earlier gains to finish lower, after agreeing to pay a 65 percent rise in iron ore prices to Brazilian mining company Vale.
Australian shares ended 0.8 percent lower after news Australia and New Zealand Banking Group could lose $200 million on its exposure to a U.S. insurer triggered a sell-off in the banking sector. ANZ was the second-biggest drag on the S&P/ASX 200 index, slumping as much as 6.3 percent to its lowest level since September 2005. Worries that ANZ's rivals could also face similar problems dented the banking sector. National Australia Bank, Westpac BankingCommonwealth Bank of Australia, which went ex-dividend, were all sharply lower.
Hong Kong stocks closed 1.6 percent lower, as a four-day gaining streak prompted investors to book profits across the board, while global lender HSBC Holdings sank further amid deteriorating credit markets. Telecom stocks dominated trade, with China Netcom hitting all-time highs amid talk of a government meeting over the weekend to discuss the industry's long awaited consolidation.
Singapore's Straits Times Index ended 0.2 percent lower, with investors staying on the sidelines over a lack of market moving news.
China's Shanghai Composite Index finished 1.6 percent higher, encouraged by launch of new equity funds and better-than-expected January export data, which partially eased concern about an economic slowdown. Late on Friday China's securities regulator approved the creation of at least three more mutual funds to raise more than 20 billion yuan, in an apparent effort to support the sagging stock market. Banking and property stocks jumped. Merchants Bank -- a favorite of fund managers, and therefore a likely beneficiary of the new fund management approvals -- surged.