Asian Shares Close Lower On Deepening Recession Concerns

December 19, 2008 6:59 a.m. EST

Tokyo, Japan (AHN) - Shares of Asian markets faltered closed lower on Friday, erasing some of the gains recorded in the last few trading sessions, despite Japan's decision to lower its key rate, failing to boost investor confidence.

Oil continued to trade lower after falling below $40-a-barrel mark, indicating that the consumers in major economies will further reduce their demand for crude and gasoline.

A light sweet crude-oil futures for January delivery was moving up by 18 cents to $36.40 a barrel in Singapore's electronic trading on Friday. The prices have been traded at several-year low level.

On Thursday, the contract for January delivery slumped in New York and closed lower by 9.6 percent, or $3.84, to $36.22 a barrel on the New York Mercantile Exchange.

In currency trading, the yen advanced as it changed hands at 88.76 yen per U.S. dollar in Asia on Friday, after it closed at 89.20 yen per dollar late Thursday in New York.

In Japan, the Nikkei 225 average closed sharply down by 78.71 points or 0.91 percent at 8,588.52 points, and the broader Topix index closed 0.5 percent lower to 834.43 points.

On Friday, the Bank of Japan announced that it has slashed its benchmark interest rate on Friday to 0.1 percent to support small and medium-sized businesses amid deepening recession.

Japan's central bank is also expected to buy corporate debt, providing liquidity to capital markets as the cash-strapped companies struggle to raise funds to survive the global slowdown.

Among automakers, shares of Toyota Motor Corp., which gets more than a third of its sales in the region, dropped by 2.0 percent, Honda moved down by 1.0 percent.

In Hong Kong, the Hang Seng index closed down by 370.30 points or 2.39 percent at 15,127.51 points, and the Hang Seng China Enterprises Index, also finished 1.4 percent lower at 8,435.31 points.

Shares of HSBC Holdings PLC, which got 26 percent of its 2007 revenue in North America, dropped by 6.2 percent in Hong Kong markets on Friday, following its decling of 3.4 percent in the previous session on reports that it is expected to raise capital.

In Australia, the S&P/ASX 200 index finished higher by 1 percent at 3,615.7 points in Sydney despite decline registered by the shares of major resources companies of the country.

In China, the Shanghai composite index closed slightly higher by 0.1 percent at 2,018.46 points. Elsewhere, South Korea's Kospi retreated from a rally in the previous session and closed up by 0.4 percent to 1,180.97 points in Seoul on Friday.

Taiwan's Taiex index changed slightly by 4,694.52 points. India's Sensitive Index was moving higher by 0.8 percent to 10,152.30 points in late trading session.