Asia's major stock indexes finished lower across the board in a volatile, holiday-thin session Thursday, despite Wall Street posting modest gains overnight.
The Shanghai Composite Index sunk 3.6 percent with banks leading the day's declines on worries over fundraising plans and a stark warning from Morgan Stanley.
Morgan Stanley Asia Executive Director Jerry Lou warned that China's ballooning stock market bubble is likely to be burst in the first half of 2010 by economic concerns arising from higher-than-expected inflation.
Investors were broadly cautious ahead of the U.S. Thanksgiving holiday and Black Friday shopping that is indicative of retailers' holiday sales.
Japan's Nikkei Average slipped to a 4-month closing low, as the yen hit a 14-year high against the dollar. The yen's strength pressured exporters, but losses were braked by rises in resource-linked shares after gold hit a record high.
The benchmark Nikkei fell 58.4 points to 9,383.24 after dipping as much as 1.2 percent in morning trade, but was still clinging above its 200-day moving average at about 9,360.
The broader Topix lost 0.45 percent to 829.5 points.
Among exporters, Canon slid 2 percent and Advantest Corp dropped 2.5 percent. Honda Motor lost 1 percent.
Toyota Motor slipped 1.1 percent after it and the U.S. government said the automaker would fix accelerator pedals in 4 million cars and trucks to address a safety issue linked to bursts of sudden acceleration and deadly accidents.
Asahi Glass plunged 7.8 percent after saying it will raise up to $1.1 billion by issuing euroyen convertible bonds to prepare to expand capacity in flat TV panel glass and solar panel materials.
But metal stocks and trading houses bucked the market trend and gained after gold prices hit record highs above $1,190 an ounce on Wednesday as the dollar fell sharply. Sumitomo Metal Mining rose 1.5 percent to 1,466 yen and trading house Mitsubishi Corp gained 1 percent to
Seoul shares retreated following a choppy session, as construction issues dropped on news of financial problems at Dubai's state-owned Dubai World and property group Nakheel.
Samsung C&T led losses, down 6.5 percent, Hyundai Engineering & Construction fell 5.6 percent.
The Korea Composite Stock Price Index (KOSPI) fell 0.77 percent to 1,599.5 points.
Banking issues continued to come under pressure. Shinhan Financial Group retreated 4 percent and Woori Finance shed 4 percent.
Woori Investment & Securities said in a note distributed on Thursday that it expected the market shares of South Korean carmakers in the United States and China to grow steadily next year.
Hyundai Motor, South Korea's top carmaker, reversed early gains to drop 1.6 percent, while Kia Motors was down 1.4 percent
Gains in the U.S. semiconductor index boosted memory chip issues, sending Hynix Semiconductor up 1.05 percent and LG Eectronics up 0.9 percent.
Retailers also capped the market's slide. Lotte Shopping rose 5.45 percent.
The benchmark S&P/ASX 200 index ended lower as investors took stock of recent gains and were sidelined ahead of a holiday weekend in the United States.
The index closed 0.3 percent lower at 4,708.60.
Banks and retailers fell. Harvey Norman shed 2.4 percent. The country's big four banks all finished in the red. Westpac fell 1.3 percent and NAB lost 1.1 percent.
Analysts said investors shifted out of these stocks into mining and commodity counters partly due to a weak dollar.
BHP Billiton rose 1.5 percent after it told shareholders that it was close to sealing its proposed iron ore venture with Rio Tinto. It also told shareholders it saw surprising resilience in China's steel sector.
Newcrest Mining benefited from gold's climb to a record above $1,194 an ounce.
Packaging firm Amcor rose 3.9 percent. It said the European Commission may require it to divest one packaging plant in return for approval of its $2 billion acquisition of Alcan assets, but any such move would account for revenue of less than $100 million.
New Zealand insurer and fund management company Tower jumped 6 percent after reporting a near 24 percent rise in its annual profit.
The Chinese market ended 3.6 percent lower, giving up all of yesterday's strong gains. Investors locked in profits, spooked by the possibility of a tighter monetary policy as China's central economic meeting looms.
Bank of China fell 3.5 percent. China Merchants Bank fell 3.1 percent and China Minsheng Banking lost 5.7 percent.
Hong Kong shares finished the session down 1.78 percent at 22,210.4 points, tracking weakness in Shanghai.
China Minsheng Banking's disappointing trading debut weighed on recently battered banking stocks.
Minsheng, which raised $3.9 billion in the world's fifth-largest initial public offering this year, fell 3.1 percent from its issue price.
Bank of China fell 2.9 percent, China Construction Bank declined 3.64 percent to end
at a three-week closing low of HK$6.89.
Taiwan's Taiex ended 0.2 percent lower, off its one-week closing high as financials fell but LCD makers limited losses. The main share index closed 17.15 points lower at 7,739.16.
Chinatrust lost 2.49 percent, while bigger rivals such as Cathay Financial shed 1.02 percent.
LCD shares rose, led by the world's No. 3 panel maker AU Optronics, which closed 2.44 percent higher, on the prospect that demand for panels that are used in flat-screen TVs and laptop PCs will remain strong in the coming year.
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