Global recovery doubts send Asian markets lower

Weaker-than-expected data from the United States and Europe triggered fresh doubts about the pace of global recovery Wednesday, with Asian markets trading broadly lower. February US consumer confidence data released Tuesday eroded expectations for sustainable consumer spending and a quick economic recovery in the United States, prompting a risk-averse reaction across Asia.

"The market is looking for signs of economic recovery and growth," said analysts at IG Markets.

"The latest set of consumer confidence figures isn't helping this view."

A surprise decline in business confidence in Germany, Europe's biggest economy, also indicated sluggish recovery and hit sentiment towards the euro in overnight trade, before the single currency rebounded in Asia. The euro fetched 1.3543 dollars in Tokyo afternoon trade from 1.3509 in New York late Tuesday.

It rose to 122.20 yen from 121.87.

Tokyo fell 1.48 percent, or 153.27 points, to 10,198.83 with the relatively strong yen denting exporters' profitability, sending related shares lower.

Shares of Toyota were down 1.50 percent, hours before its president Akio Toyoda was set to testify before US Congress on the carmaker's safety problems that have prompted global recalls of more than eight million vehicles.

Worries about the US economy saw Hong Kong close down 0.75 percent, or 155.26 points to 20,467.74, but developers were boosted by plans to cool the territory's red-hot property market which were more benign than expected.

China's banks led losses on concerns Beijing will tighten monetary policy. ICBC shed 1.6 percent, China Construction Bank was down 1.5 percent and Bank of China lost 1.3 percent.

Sydney dived 1.48 percent, or 69.8 points, to close at 4,648.5, dragged lower by mining giants BHP Billiton and Rio Tinto on lower commodity prices.

"Negative sentiment from the US session overnight flowed through to Australian trade, with the cyclical material and energy sectors leading the market lower," IG Markets analyst Ben Potter said.

Heavyweight stock BHP Billiton slipped 2.92 percent while Rio Tinto shed 3.23 percent.

However, Shanghai bucked the trend, adding 1.33 percent, or 39.60 points to 3,022.18 on bargain-hunting following recent falls, boosting banking stocks. The region mainly took its cue from Wall Street, where US stocks slumped 0.97 percent overnight in reaction to the disappointing data and on a report showing a rise in the number of problem banks being followed by regulators.

The Conference Board reported that its consumer confidence index plunged to 46.0, its lowest since April 2009, from 56.5 a month earlier as Americans became more pessimistic about job prospects.

Traders were also waiting for scheduled comments from Federal Reserve chairman Ben Bernanke on the state of the economy to panels of the House of Representatives and Senate.

He is expected to shed light on the central bank's sudden decision last week to hike interest charged on short-term emergency loans given to banks.

The move was widely taken as a sign that the United States had started to unwind massive stimulus measures to support the economy during the financial crisis.

AFP