Asian Stocks Close Lower on US Worries

Asian markets kicked off the new year under pressure on worries about a slowing global economy. But oil and gold prices continued to edge higher approaching record highs.

Singapore's Straits Times Index closed 0.6 percent lower at 3,461.22, on the back of disappointing fourth-quarter GDP results, showing the economy contracted unexpectedly.

Singapore Airlines and Air China were both in the red after the Chinese carrier's parent said SIA's $920 million bid for China Eastern Airlines was too low. China Eastern shares however moved to the upside in Hong Kong.

The benchmark Hang Seng Index lost 0.9 percent to close at 27,560 while the Shanghai Composite Index climbed 0.2 percent at to end at 5,272.

South Korea's KOSPI lost 2.3 percent to finish the session at 1,853, dragged down by the telco and the auto sectors.

SK Telecom and other mobile phone operators fell into the red on news that South Korea's president-elect, Lee Myung-bak, wanted to cut call charges. This would in turn hurt earnings of these companies.

Shares of Hyundai Motor also slid as investors were not confident of the auto-maker's sales target for 2008. The firm said it aims to ramp up sales by 20 percent this year.

Australian shares held steady with the S&P/ASX 200 closing up 0.2 percent at 6,353 led by a rise in mining plays. Retailers were mixed despite reports of strong post-Christmas sales.

Centro Properties surged on news it is actively seeking potential investors. This comes after the global credit squeeze made it difficult to refinance $1.1 billion of its debt.

Malaysian shares traded in the red with the KL Composite ending down 0.6 percent at 1,435. Telekom Malaysia shares got a boost on news U.S. phone company AT&T is interested in buying a stake in its mobile unit, TM International.

All Japanese financial markets remain closed on Wednesday and Thursday for New Year holidays. The markets will reopen for a half day of trading on Friday, Jan. 4.