Asian markets pulled both ways on Friday, as Taipei jumped over 2 percent while Shanghai skidded, with concerns about the health of domestic and global economies dominating investor sentiment.
Japan's Nikkei 225 average closed a modest 0.3 percent higher, ending the week on a positive note. The benchmark index recovered from the morning's slide as a seven-month high dollar against the yen boosted exporters such as Canon.
Toyota Motor lent support the the market, soaring 5.4 percent as the world's biggest automaker kept its forecasts unchanged despite posting a 28 percent drop in quarterly net profiton a strong yen and slumping U.S. sales.
However, bank stocks such as Mitsubishi UFJ Financial Group lost ground due to the bleak outlook for the domestic economy, and more bad news out of the U.S. financial sector after Citigroup agreed to buy back $7.3 billion of illiquid securities, while insurance giant American International Group reported a big quarterly loss.
Nomura Holdings, the country's top securities firm, is said to be in talks with Collins Stewart, a British mid-cap stock broker, according to sources close to the matter.
Tokyo cut its view on the economy on Thursday, dropping the word "recovery" in a key monthly report for the first time in nearly five years as raw material costs and a global slowdown push the world's No.2 economy towards a recession.
Australia managed to close a touch firmer despite Wall Street's losses, as short-covering supported the market on prospects of interest rate cuts. Westpac Banking boosted sentiment when it gave an update saying its asset quality remained sound, unlike the country's other big banks ANZ and NAB. Its shares gained 1.7 percent while the S&P ASX 200 edged up 0.1 percent.
In Seoul, the benchmark Kospi index rebounded from a 1 percent slide in early morning trade, to close 0.3 percent higher. Bank stocks, which were hammered by the Bank of Korea's interest rate hike on Thursday, made a comeback. Gains in heavyweights such as LG Electronics and Hynix Semiconductor aided by a weaker won,further boosted the index.
Taiwan's Taiex was the star performer in the region, jumping over2 percent to a more than one-week high, led by tech stocks, amid bargain hunting in beaten-down bellwethers TSMC and Acer. The world's No.3 flat panel maker, AU Optronics led the gainers, rising as much as 5 percent. Investors brushed off the sector's unexpectedly weak export growth in July, which resulted in Taiwan's first trade deficit in two years.
Chinese stocks suffered sharp losses, dipping 4.5 percent to a 19-month low, as fears took hold that corporate profit growth would be hit by a slowing economy when the euphoria of the Beijing Olympic Games ended. Property plays such as Vanke shed 4.8 percent, and financials led the declines. Olympics-theme shares were hurt by profit-taking, with Peking Duck restaurant chain Quanjude down 10 percent.
Hong Kong's Hang Seng Index took China's lead and fell 1 percent. Shippers remained trapped in a losing streak for the fifth straight session. China's largest shipping firm Cosco tumbled after the Baltic Dry Index, which gauges changes in the price of shipping commodities, suffered its sharpest fall in two months overnight, amid concerns a global slowdown will dampen demand for resources. But shares of Lenovo got a lift as the world's No.4 personal computer maker posted quarterly earnings within forecast, with a 65 percent rise in net profit.
Singapore's Straits Times Index extended Thursday's losses by closing 1 percent lower, led by banking counters after Citigroup cut its target price for DBS Group, and downgraded Overseas Chinese Banking Corp following the earnings reports.