Asian indexes ended lower Wednesday, with banks such as Mitsubishi UFJ Financial Group weighed down by fears about the global credit markets, while weak earnings reports hit shares of Telstra Corp. in Sydney and Hong Kong Exchanges & Clearing in Hong Kong.
The benchmark Nikkei 225 Index closed down 280.55 points or 2.11% at 13,023.05 while the benchmark Hang Seng index closed down 347.57 points or 1.61% at 21,293.32.
On the data front -- the Cabinet Office said that the Japanese economy shrank by 0.6% in the second quarter of 2008, marking its first decline since the second quarter of 2007. The decline was in line with analysts' expectations, but it was sharply lower than the revised 0.8% quarterly expansion in the first quarter. GDP fell an annualized 2.4% in the quarter compared to the revised 3.2% growth in the previous quarter.
Meanwhile, Japan's current account surplus plummeted by 67.4% in June compared to a year earlier and trade surplus fell 81.3% to 252.1 billion yen, with exports down 1.5% to 6.84 trillion yen and imports up 17.9% to 6.59 trillion yen.
In the financial sector, Mizuho Financial Group plunged 3.5%, Sumitomo Mitsui Financial Group plummeted 3.2% and Mitsubishi UFJ Financial Group tumbled 4.2%. Mitsubishi UFJ said Tuesday that it will offer $3 billion to buy the remaining 35% of U.S.-based bank UnionBanCal Corp.
Daiwa Securities slumped 4.8% after the second largest brokerage in Japan said Tuesday that it may set up a $4.5 billion private equity fund as it seeks to diversify beyond stocks, bonds and investment banking. Top brokerage Nomura Holdings fell 4.4%.
Among exporters, Canon lost 2.4%, Sony fell 3.0% and machinery maker Komatsu declined 2.1%. Sony reportedly plans to start selling eleven-inch organic electroluminescence televisions in Europe as soon as next year.
In the auto space, Toyota fell 1.2%, Honda eased 0.3%, Suzuki lost 1.1% and Mitsubishi Motors gave away 0.6%, while Nissan added 0.1%.
High-tech losers included Advantest 4.5%, Kyocera 1.7%, Matsushita Electrical Industrial 0.4%, Fujitsu 0.7%, Fanuc 1.8% and NEC 1.0%.
Lower crude oil prices weighed on oil-related stocks. Oil and gas explorer Inpex Holdings and Nippon Oil plunged 2.9% each, while Nippon Mining Holdings tumbled 3.8%.
The real estate sector fell on a surprising 3.4% on-quarter drop in housing investment shown in the GDP data. Sumitomo Realty & Development sank 4.9% and Mitsui Fudosan shed 3.3%.
The benchmark Shanghai Composite Index fell to a new 19-month closing low. The key index closed down 10.90 points or 0.44% at 2,446.30, off a low of 2,370.74. Over the last four days, the index has lost 10.3%.
On the economic front, retail sales in China jumped by 23.3% on year to 862.9 billion yuan in July, the National Bureau of Statistics said Wednesday. Analysts' had expected an annual increase of 22.4%. In June, retail sales increased 23% on year.
Urban retail sales were up 24.0% at 590.5 billion yuan, while rural retail sales were up 21.8% at 272.4 billion yuan. For the period January through July, retail sales were up 21.7% on year at 5.97 trillion yuan.
Among nonferous metal stocks, Jiangxi Copper surged 4.0% after slumping almost 18% in the previous four trading session and Aluminum Corp of China gained 1.9%. Zijin Mining Group jumped 3.4%. The company has agreed to buy the remaining 40% interest that it does not already own in subsidiary Qinghai West Copper Mining in a deal worth 864 million yuan.
Property developers also recovered, with China Vanke gaining 1.7% and Poly Real Estate Group jumped 6.8%.
In the financial sector, China Life Insurance fell 3.4%, Bank of Beijing lost 3.3% and Sinolink Securities surged by the 10% daily limit.
China Southern Airlines slipped 0.2% after the company said it carried 5.34 million passengers in July, down 1.9% from a year earlier.
Elsewhere:
Taiwan's Taiex closed flat at 7,292.
Singapore's STI closed down 0.2% at 2,811.
Malaysia's KLCI closed down 0.6% at 1,112.
Indonesia's Jakarta Composite index closed up 0.3% at 2,063.
India's Sensex closed down 0.8% at 15,093.
South Korea's Kospi fell 0.9%.
India's Sensex gave up 0.8%.
Australia's S&P/ASX 200 shed 2% to 4,951.60.
New Zealand's NZX 50 index gave up 0.3%.
with files from other wire services
