Asian stock markets sluggish as economic fears persist

Asian stock markets were mixed Friday, with Japan's benchmark up 1.5 per cent, as persistent worries about the deteriorating world economy and financial system sidelined many investors.

Asian stock markets were mixed Friday, with Japan's benchmark up 1.5 per cent, as persistent worries about the deteriorating world economy and financial system sidelined many investors.

Trade was listless throughout the region after a bruising, volatile month that saw Asia's export-driven economies sink deeper into recession amid collapsing global demand and their currencies wither.

Sentiment was buoyed somewhat by reports slumping banking giant Citigroup, which has already taken billions in government aid, was nearing a deal to give the U.S. an ever bigger ownership stake, as much as 40 per cent. A deal was later announced. Combined with more bailout measures in Britain and shake-ups at European banks, the agreement lifted some financial shares in Japan and elsewhere.

But most investors appeared to be holding back as the onslaught of negative news about the global economy showed no signs of letting up.

The recession's toll on global economies widened Thursday as Royal Bank of Scotland and General Motors Corp. reported billions more in losses.

In Asia on Friday, figures showed that Japan's industrial production plunged a record 10 per cent in January from December as manufacturers continued to slash output. Household spending and retail sales also fell. India's economic growth sputtered to a worse-than-expected 5.3 per cent in the last  quarter from the previous year — the slowest in about six years.

Until there was evidence sweeping government measures to jump-start the global economy were starting to take effect, equities markets were likely to remain lackluster, traders said.

"Confidence remains really beaten up," said Miles Remington, head of Asian sales trading at BNP Paribas Securities in Hong Kong.

"Internationally the picture is very negative. A lot of people are very happy to be sitting on the sidelines."

The Nikkei 225 stock average rose 110.49 points, or 1.5 per cent, to 7,568.42 — but finished the month down nearly four per cent to extend this year's losses to almost 15 per cent.

In Hong Kong, the Hang Seng pulled back 83.37 points, or about 0.7 per cent, to 12,880.89 in a back-and-forth session. South Korea's Kospi rose 0.8 per cent to 1,063.03.

Elsewhere, India's slumping growth figures sent the country's main index tumbling by two  per cent. China's Shanghai benchmark dropped 1.8 per cent as investors continued to pocket gains from the market's recent rally. Singapore sank, Taiwan gained.

Among financials received some support as news about the Citigroup deal, expected to be announced in the U.S. later Friday, ease fears about the financial sector. Japan's Mitsubishi UFJ Financial Group Inc., the country's largest bank, rose 2.7 per cent.

South Korea's KB Financial Group Inc. jumped 6.5 per cent.

After trading ended, Sony Corp. said its president was stepping down — adding to the string of Japanese companies hoping to fight the global slowdown with renewed leadership. The stock rose two per cent.

In the U.S., major stock indexes gave up early leads to close lower, with health-care stocks bearing the brunt of the selling. The Dow Jones industrial average fell 88.81, or 1.2 per cent, to 7,182.08. The Standard & Poor's 500 index fell 12.07, or 1.6 per cent.

U.S. stock index futures little changed. Dow futures were flat at 7,178, while S&P futures were down one point at 751.1.

In currencies, the dollar shed some if its recent gains, falling to 97.59 yen from 98.27 yen. The euro slipped to $1.2658 US from $1.2710.

Oil prices weakened in Asian trade after an overnight rally.

Light, sweet crude for April delivery down $1.33 at $43.89 a barrel. On Thursday, the contract jumped $2.72 US, or 6.4 per cent, to settle at $45.22 on the New York Mercantile Exchange.