Asian markets were mixed Friday, ending the month with losses on continued investor concern over the world economy and the financial system, while safety bids such as dollar buying erased some of their recent gains.
The advances in stock markets at the start of the year unraveled further in February as the MSCI index of Asian shares outside Japan headed for a 5 percent monthly fall, having hit at one point their lowest since the five-year lows in late November. Weak economic data in Asia, including double digit export drops and contractions in gross domestic product, pummeled regional currencies such as the South Korean won. In Japan, production at factories fell by a record 10 percent last month, and new jobs proved harder to find, showing the country's worst recession since World War Two is deepening.
Risk aversion in February was reflected in the surge of the dollar, which is on track to its biggest monthly gain against the yen since 1995, and a rally in gold that took it past the $1,000 an ounce barrier to approach a March 2008 record.
The dollar fell against the Japanese yen as investors booked profits from a recent rally. The U.S. currency has benefited from an at times intense flight to safety. Oil retreated to the $44 a barrel level after jumping more than 6 percent on expectations oil-producing cartel will cut output again and due to signs of a rebound in gasoline demand in the United States.
The Nikkei 225 Average gained 1.5 percent, boosted by news of an agreement between the U.S. government and Citigroup, with defensive shares such as KDDI Corp climbing. But drugmaker Daiichi Sankyo fell 5.3 percent to after news of a U.S. investigation into an FDA decision to remove a scientist from a panel that reviewed a key drug candidate for the company.
South Korea's KOSPI finished 0.7 percent higher helped by gains in banks and insurers, but rises were limited by further weakness in the won and persistent economic worries.
Australian shares ended flat as gains in banks were offset by losses in Woolworths and QBE Insurance Group after their profits missed estimates. Takeover hopes lifted coal stocks after Singapore-listed commodities trader Noble Group launched a bid for Gloucester Coal. Gloucester surged 25.9 percent on the offer. Gloucester traded above Noble's offer price, suggesting some investors were betting on rival bids.
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Hong Kong shares closed 0.6 percent down as losses on Wall Street and a weak run in the Shanghai market weighed but shares in HSBC extended a two-day rally ahead of its earnings results next week. Chinese property stocks were sold down on Friday with investors disappointed by the lack of a bigger stimulus package for the sector hit by sliding prices. China Overseas Land fell 3.4 percent while Guangzhou R&F Properties also fell.
Singapore's Straits Times Index was 1.4 percent lower. Industrial group Sembcorp Industries fell 1.4 percent after it reported a 34 percent fall in fourth quarter net profit due to weaker performances by its utility, environmental and industrial park businesses.
China's Shanghai Composite Index was down 1.8 percent, with producers of non-ferrous metals leading, as money fled the market in the belief that a rally earlier this month had left share prices too highly valued. Jiangxi Copper,Aluminum Corp of China and Zijin Mining all plunged on the view that excessive hopes for an early recovery of China's economy had pushed them up too far early this month.