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Asian Markets Hit by Profit Woes

Fears of steep losses at corporate bellwethers from Citigroup to Sony hit Asian shares on Tuesday, signaling the extent of the global economic slowdown and bolstering less risky assets such as government debt.

The euro extended its slide to near a one-month low against the dollar as the European Central Bank looks set to cut interest rates this week in response to slowing growth, while oil prices continued to fall after slumping nearly 8 percent on Monday on fears that recessions in some countries will slash energy demand.

Still, losses in Asian shares were not as steep as in previous days, while the Export-Import Bank of Korea sold $2 billion in five-year dollar bonds, indicating demand for new issuance in regional credit markets, albeit at a premium.

Concerns over big quarterly losses kept investors on edge. Citigroup
could record a fourth-quarter operating loss of over $10 billion, the Wall Street Journal reported on Monday, while U.S. aluminum producer Alcoa announced a fourth-quarter loss. Asia's export companies are also hurting as major overseas markets such as the United States are mired in recession. Sony may post an operating loss of about $1.1 billion this financial year, its first such loss in 14 years, a source close to the matter told Reuters, confirming an earlier newspaper report. Crude oil prices fell below $38 a barrel as a stronger dollar and economic fears weighed.

Japan's Nikkei 225 Average fell 4.8 percent to its lowest close in a month, hit by a stronger yen that nailed exporters and fears of losses that reinforced worries about the global economy. Sony tumbled nearly 9 percent. Other exporters also suffered -- Canon down nearly 7 percent, Nissan Motor down 8.5 percent and Toyota down 6.3 percent.

South Korea's KOSPI finished nearly 1 percent higher, helped by Hynix Semiconductor which gained 2.1 percent, which rose on hopes chip prices have bottomed, while banks including Woori Finance Holdings also turned higher.

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Australian shares ended down 0.8 percent, though well off the day's worst levels, dragged down by resources stocks on weaker oil and metals prices and ongoing worries about the global economic outlook. Global miner Rio Tinto fell 2.3 percent, with rival BHP Billiton off 1.3 percent, pressured by lower metals prices. Energy companies also fell, Woodside Petroleum slid 2.6 percent, while Oil Search dropped 5.0 percent and Santos lost 2.2 percent.

Hong Kong shares closed 2.1 percent lower after flitting in and out of negative territory, with investors prepared to see poor corporate earnings amid a worsening global economic slump. Top bank ICBC fell 1.4 percent while No.3 lender Construction Bank climbed. Aluminum Corp of China, or Chalco, dropped 6 percent, adding to Monday's 8 percent slide, after Credit Suisse cut its earnings estimate for the company by 62 percent in 2008 and 138 percent in 2009 amid slumping alumina and aluminum prices.

Singapore's Straits Times Index closed 0.8 percent lower after early gains.

China's Shanghai Composite Index was down 2 percent. Shares in Shenzhen Development Bank, a mid-sized Chinese bank, plunged their 10 percent daily limit at the opening after the bank slashed its 2008 profit estimate because of bad loan provisions.