Asian markets fall on news of bad earnings

Most Asian markets sank Monday as investors digested a slew of awful earnings reports from the region's corporate heavyweights and inauspicious signs from Wall Street, where stock averages clocked their worst January ever.

Japan's Nikkei 225 stock average was down 120.07, or 1.5 per cent, at 7,873.98, Hong Kong's Hang Seng slid 3.5 per cent to 12,812.88 and South Korea's Kospi was off 1.3 per cent at 1,146.95. Australia's main index fell 1.2 per cent and markets in Singapore, Thailand and India fell two per cent or more.

Mainland China's market, reopening after the weeklong Lunar New Year's holiday, rose amid a report the government is considering new steps to boost growth. The Shanghai Composite index gained 1.1 per cent at 2,011.68.

Sentiment was shaky after big-name Japanese companies like Honda, NEC and Hitachi announced dire results on Friday and data showed the U.S. economy shrank at a 3.8 per cent pace in fourth quarter.

For investors, it was academic that the reported contraction in the world's largest economy wasn't as bad as expected, since many forecasters believe gross domestic product is already shrinking at an even faster pace in the first quarter of this year.

Adding to the gloom, the Dow Jones industrial average and Standard & Poor's 500 index posted record percentage drops for January 8.8 per cent and 8.6 per cent, respectively. Some market watchers believe that's a bad omen for the rest of the year, as the market usually ends a year down after falling in January.

Uncertainty abounds

"The spotlight is on the economy and earnings and doubts about when the recovery in the U.S. will materialize," said Song Seng Wun, head of research at CIMB-GK in Singapore. "We are likely to continue experiencing bouts of optimism alternated with periods of uncertainty. Tomorrow the markets could be racing ahead."

"But once the dust has settled from the current earnings season, it may set the stage for investors to look at the markets from a fundamental perspective and decide that stock prices have fallen enough," he said.

Losses in Hong Kong stocks, which rallied Friday on what proved to be false expectations of a weekend stimulus announcement from China, were led by financial stocks. HSBC Holdings shed 3.9 per cent.

In Tokyo, blue chip stocks continued to wilt as investors braced for more earnings shocks after last week's reports showed the country's exporters had been hammered by the global economic downturn and strong yen.

Hitachi Ltd., which makes everything from home appliances to medical equipment, dived 17 per cent after forecasting a loss of 700 billion yen ($9.6 billion) for its fiscal year ending March and a plan to slash about 7,000 jobs. It announces quarterly results Tuesday.

Mizuho Financial Group Inc. lost 6.6 per cent on the back of its 50.55 billion yen net loss in the April-December period.

Electronics giant NEC Corp. slid 5.7 per cent in the aftermath of announcing its quarterly loss swelled to 130 billion yen ($1.8 billion) and a plan to cut 20,000 jobs worldwide in the coming year. Panasonic Corp. and Mazda Motor Corp. release earnings on Wednesday.

Taiwan's stock measure rose 0.3 per cent as the government announced an $11.8 billion plan to create 150,000 jobs this year amid waves of layoffs and company closures caused by the global economic slowdown.

On Wall Street, the Dow Jones industrial average fell 148.55, or 1.8 per cent, to 8,000.46 on Friday. The Standard & Poor's 500 index fell 19.26, or 2.3 per cent, to 825.88, and the Nasdaq composite index fell 31.42, or 2.1 per cent, to 1,476.42.

U.S. stock futures were down modestly, pointing to a weaker open Monday. Dow futures were down 83, orone per cent, at 7,872 and S&P 500 futures were off 7.9, orone per cent, at 814.60.