Friday, February 27, 2009

Asian stock markets mixed as economic fears weigh

HONG KONG (AP) — Asian stock markets were narrowly mixed Friday, with Japan's benchmark up more than 1 percent, as persistent worries about the deteriorating world economy and financial system sidelined many investors.

Trade was listless throughout the region after a bruising, volatile month that saw Asia's export-driven economies sink deeper into recession amid collapsing global demand and their currencies wither.

Sentiment was buoyed somewhat after the British government said Thursday it would prop up ailing banks by allowing them access to government insurance against future losses on toxic assets. Combined with additional bailout measures in the U.S., the action helped lift Asian banking shares.

But most investors seem to be holding back as the flood negative of news about the global economy showed no signs of letting up.

The recession's toll on global economies widened Thursday as Royal Bank of Scotland and General Motors Corp. reported billions more in losses. In the U.S., reeling financial giant Citigroup, which has already taken billions in government aid, was nearing a deal to give the government an ever bigger owernship stake, as much as 40 percent.

And in Asia Friday, figures showed that Japan's industrial production plunged a record 10 percent in January from February as manufacturers continued to slash output. Household spending and retail sales also fell. India's economic growth sputtered to a worse-than expected 5.3 percent in the last quarter_ the slowest in about six years.

Until there was evidence sweeping government measures to jump-start the global economy were starting to work, equities markets were likely to remain lackluster, traders said.

"Confidence remains really beaten up," said Miles Remington, head of Asian sales trading at BNP Paribas Securities in Hong Kong. "Internationally the picture is very negative. A lot of people are very happy to be sitting on the sidelines."

The Nikkei 225 stock average rose 110.49 points, or 1.5 percent, to 7,568.42 — finishing the month down nearly 4 percent and extending this year's losses to almost 15 percent.

In Hong Kong, Hang Seng edged down 14.05, or 0.1 percent, to 12,880.89 in a back-and-forth session. South Korea's Kospi rose 0.8 percent to 1,063.03.

Elsewhere, India's slumping growth figures sent the country's main index tumbling by 2 percent. China's Shanghai benchmark dropped 1.8 percent as investors continued to pocket gains from the market's recent rally. Singapore also sank.

In the U.S., major stock indexes gave up early leads to close lower, with health care stocks bearing the brunt of the selling. The Dow Jones industrial average fell 88.81, or 1.2 percent, to 7,182.08. The Standard & Poor's 500 index fell 12.07, or 1.6 percent.

U.S. stock index futures were up modestly.

In currencies, the dollar shed some if its recent gains, falling to 97.80 yen from 98.27 yen. The euro trade higher at $1.2715.

Oil prices weakened in Asian trade after an overnight rally. Light, sweet crude for April delivery down 51 cents at $44.71 a barrel. On Thursday, the contract jumped $2.72, or 6.4 percent, to settle at $45.22 on the New York Mercantile Exchange.


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