Asian markets ended mostly lower Friday, with stocks in Tokyo sliding a day after Standard & Poor’s cut the country’s sovereign-debt rating.
Japan’s Nikkei 225 Index dropped off 118.32 points, or 1.1%, to 10,360.30
Hong Kong’s Hang Seng Index fell back 162.60 points, or 0.7%, to 23,617.
Weak earnings reports from frontline companies such as Canon Inc. and Kia Motors Corp. also weighed on sentiment.
Japan was pressured after ratings agency S&P cut the country’s long-term credit rating to AA minus from AA, citing the nation’s high debt levels.
Financials in particular dropped sharply, on concern the downgrade will hurt investor sentiment toward banks, which are big holders of Japanese government bonds.
Shares of Mizuho Financial Group lost 1.2% and Mitsubishi UFJ Financial Group shed 2.7%.
But Japanese government bonds recovered after a weak initial response, while the yen retraced some of its overnight losses in New York.
In Friday trade, the March JGB contract was up 0.14 at 139.92 points, while the 10-year JGB yield slipped one basis point to 1.215%.
In foreign-exchange trade, the dollar was at 82.67 yen, slipping back from ¥82.92 late in New York on Thursday, while the euro was fetching ¥113.24, from ¥113.83. The euro was changing hands for $1.3697 U.S. from $1.3734 U.S.
The focus now shifts to the Japanese parliament, where the government is facing an uphill battle to implement budget and tax reforms -- issues cited by S&P in cutting Japan’s debt rating, according to some experts.
Tokyo shares, meanwhile, were also dragged by a 3.1% fall in shares of Canon after the company reported a 12% fall in its net profit for the October-December quarter due to higher sales promotion costs and lower prices of compact cameras.
Also pressuring the market, NEC Corp. tumbled 4.5% after posting a wider loss in the fiscal third quarter, while Advantest Corp. skidded 7.4% on a disappointing outlook.
Elsewhere, South Korean stocks snapped a four-session winning streak, with automobile and shipbuilding stocks leading the fall as investors locked in profits.
Shares of Hyundai Motor Co. lost 4.1%, while Hyundai Heavy Industries gave up 0.6%.
Shares of Kia Motors fell 3.1% after the auto maker reported a lower-than-expected 4.6% increase in fourth-quarter net profit.
Daewoo Securities analyst Han Chi-hwan said that on balance fourth-quarter earnings results and outlook commentary from local companies seemed positive.
Samsung Electronics rose 1.6% after posting higher-than-expected fourth-quarter earnings. Hynix Semiconductor jumped 5.4% after providing an upbeat outlook despite reporting an 83% on-year fall in fourth-quarter net earnings on Thursday.
Several resource-sector shares declined in the region after crude oil and gold prices ended on a weak note overnight.
BHP Billiton fell 1.1% and Newcrest Mining tumbled 3.6% in Sydney, while PetroChina Co. shed 0.9% and Zijin Mining Group Co. fell 1.6% in Hong Kong.
Cnooc shares plunged 7% in Hong Kong after Bank of America-Merrill Lynch downgraded the stock to neutral from buy after a strong run up in the shares.
In Sydney, shares of Energy Resources of Australia slumped 12.9% after it scrapped its final dividend and reported a 2010 net profit that came in at the bottom end of its recently delivered guidance.
In other markets
Shanghai’s CSI 300 Index prospered 10.27 points, or 0.3%, to 3,036.74
Korea’s Kospi Index settled 7.14 points, or 0.3%, to 2,107.87
Taiwan’s Taiex Index moved forward 43.02 points, or 0.5%, to 9.145.35
Singapore’s Straits Times Index regained 9.86 points, or 0.3%, to 3,229.69
New Zealand’s NZX 50 inched up 1.70 points to 3,352.64
Australia's S&P/ASX 200 gave back 31.20 points, or 0.7%, to 4,774.90.
