Asian markets ended lower Friday as Washington Mutual's failure and uncertainty over the fate of the U.S. government's $700 billion rescue plan for the financial sector hurt investor sentiment, dragging down financial-sector stocks as well as exporters.
The benchmark Nikkei 225 Index closed down 113.37 points or 0.94% at 11,893.16 while the benchmark Hang Seng index closed down 252.34 points or 1.33% at 18,682.09.
On the economic front in Japan, the Ministry of Internal Affairs and Communications said that core inflation was up 2.4% on year in August, in line with analyst expectations. It also held steady from the July figure, equaling an 11-year high. Overall nationwide CPI was up an annual 2.1%, matching forecasts, after a 2.3% gain on year in the previous month.
The inflation reading for Tokyo in September, considered a leading indicator for the nationwide trend, was up an annual 1.4% overall, higher than the 1.2% forecast and the 1.3% increase in the previous month. Tokyo CPI was up 0.3% on month.
Meanwhile, foreign residents became net buyers of Japan stocks and net sellers of Japan bonds and notes last week. The Japanese Ministry of Finance reported Friday that foreign residents bought a net 15.3 billion yen worth of Japanese stocks in the week ended September 20. Foreigners had been net sellers of Japan stocks the two previous weeks. Foreign residents were sellers of a net 86.5 billion yen in Japan bonds and notes for the week, having been net buyers for at least the four preceding weeks.
Sea transporters, nonferrous metals, and iron and steel stocks led the decliners, while major gainers included pharmaceutical and insurance companies.
The falling Baltic Dry Index hit shippers hard. Kawasaki Kisen plunged 7.2% and Mitsui O.S.K. Lines plummeted 6.3%. Among commodity-linked stocks, Mitsui & Co. shed 5.0% and Itochu fell 3.8%. Oil & gas miner edged up 0.3%, but Nippon Mining Holding dropped 2.1%, and Nippon Oil declined 2.9%.
In the non-ferrous metals sector, Sumitomo Metal Mining fell 4.0% and Mitsui Mining and Smelting shed 2.6%. Among iron & steel stocks, JFE Holdings tumbled 3.5%, Sumitomo Metal Industries slumped 4.4% and Nippon Steel plunged 3.1%.
Meanwhile, drug makers staged a rally as Takeda Pharmaceutical's share buyback plan lifted sentiment in the sector. Takeda jumped 4.2% and Eisai gained 2.6%. Takeda Pharmaceutical said Thursday that it would buy back up to 9 million, or 1.1%, of its shares outstanding for 50 billion yen to increase its shareholder returns.
Among insurers, Mitsui Sumitomo Insurance rose 3.5% and Sompo Japan Insurance advanced 0.8%.
In the financial sector, Mitsubishi UFJ climbed 1.5%, Mizuho Financial added 1.1%, and Sumitomo Mitsui edged up 0.3%. Nomura Holdings, Japan's largest brokerage firm, gained 0.5%.
CHINA
The Chinese market closed flat, ahead of a week long holiday and on uncertainty surrounding the U.S. financial sector bailout. The China markets will remain shut next week for the National Day holiday. The benchmark Shanghai Composite Index closed down 3.72 points or 0.16% at 2,293.48.
The key index fell 4.32% in September, but is up about 27% from the 22-month closing low hit on September 18 on the back of removal of stamp duty on share purchases, sovereign wealth fund plans to purchase domestic bank shares, and encouragement for companies to buy back shares.
Ping An Insurance fell on worries about possible losses from its investment in Fortis, but brokerages provided some support amid continued hopes for the launch of margin trading. Ping An Insurance plunged 8.3%. Haitong Securities soared 9.5% and CITIC Securities jumped 7.3%, extending Thursday's10% surge.
Property developers rebounded, with China Merchants Property Development and China Vanke rising by the 10% daily limit. Poly Real Estate gained 9.9%. Property firms normally book higher sales during the National Day holiday due to promotions and there is also the expectation that China will ease monetary policy.
Shenzhen Development Bank fell 2.1% after its board canceled plans to place 120 million new A-shares with Baosteel Group. China Petroleum & Chemical Corp or Sinopec and index heavyweight PetroChina shed 1.3% each.
Aerospace stocks tumbled after China successfully launched its third manned space flight, carrying three astronauts on a 68-hour mission that will include the nation's first ever space walk. Shaanxi Aerospace Power Hi-Tec and Aerospace Hi-Tech Holding both plunged 10% and Long March Launch Vehicle Technology plummeted 9.4%.
Elsewhere:
Taiwan's Taiex closed down 2.2% at 5,929.
Singapore's STI closed down 1.3% at 2,411.
Malaysia's KLCI closed down 0.4% at 1,020.
Indonesia's Jakarta Composite index closed down 1.3% at 1,846.
South Korea's Kospi fell 1.7% to 1,476.33, after rising for five straight sessions.
New Zealand's NZX 50 index came off early highs after data showed the country's economy shrank in the second-quarter. The index closed down 1.6% at 3,187.58, after rising as high as 3,264.03.
Australia's S&P/ASX 200 index dipped 0.5% to 4,904.80, retreating from the session's high at 4,990.50.
with files from other wire services
