Weaker-than-expected data from the United States and Europe triggered fresh doubts about the pace of global recovery Wednesday, with Asian markets trading broadly lower.
February US consumer confidence data released Tuesday eroded expectations for sustainable consumer spending and a quick economic recovery in the United States, prompting a risk-averse reaction across Asia.
"The market is looking for signs of economic recovery and growth," said analysts at IG Markets. "The latest set of consumer confidence figures isn't helping this view."
A surprise decline in business confidence in Germany, Europe's biggest economy, also indicated sluggish recovery and hit sentiment towards the euro in overnight trade, before the single currency rebounded in Asia.
The euro fetched 1.3543 dollars in Tokyo afternoon trade from 1.3509 in New York late Tuesday. It rose to 122.20 yen from 121.87.
Tokyo fell 1.48 percent, or 153.27 points, to 10,198.83 with the relatively strong yen denting exporters' profitability, sending related shares lower.
Shares of Toyota were down 1.50 percent, hours before its president Akio Toyoda was set to testify before US Congress on the carmaker's safety problems that have prompted global recalls of more than eight million vehicles.
Worries about the US economy saw Hong Kong close down 0.75 percent, or 155.26 points to 20,467.74, but developers were boosted by plans to cool the territory's red-hot property market which were more benign than expected.
China's banks led losses on concerns Beijing will tighten monetary policy. ICBC shed 1.6 percent, China Construction Bank was down 1.5 percent and Bank of China lost 1.3 percent.
Sydney dived 1.48 percent, or 69.8 points, to close at 4,648.5, dragged lower by mining giants BHP Billiton and Rio Tinto on lower commodity prices.
"Negative sentiment from the US session overnight flowed through to Australian trade, with the cyclical material and energy sectors leading the market lower," IG Markets analyst Ben Potter said.
Heavyweight stock BHP Billiton slipped 2.92 percent while Rio Tinto shed 3.23 percent.
However, Shanghai bucked the trend, adding 1.33 percent, or 39.60 points to 3,022.18 on bargain-hunting following recent falls, boosting banking stocks.
The region mainly took its cue from Wall Street, where US stocks slumped 0.97 percent overnight in reaction to the disappointing data and on a report showing a rise in the number of problem banks being followed by regulators.
The Conference Board reported that its consumer confidence index plunged to 46.0, its lowest since April 2009, from 56.5 a month earlier as Americans became more pessimistic about job prospects.
Traders were also waiting for scheduled comments from Federal Reserve chairman Ben Bernanke on the state of the economy to panels of the House of Representatives and Senate.
He is expected to shed light on the central bank's sudden decision last week to hike interest charged on short-term emergency loans given to banks.
The move was widely taken as a sign that the United States had started to unwind massive stimulus measures to support the economy during the financial crisis.
Greece's debt woes also continued to weigh on sentiment, with a credit downgrade for Greece's top banks raising pressure on Athens ahead of a general strike, as the government struggles with a crisis that has shaken the eurozone.
Oil was higher, with New York's main futures contract, light sweet crude for April delivery, up 40 cents to 79.26 dollars a barrel.
London's Brent North Sea crude for April delivery rose 33 cents to 77.58 dollars.
Hong Kong gold closed lower at 1,100.00-1,101.00 US dollars an ounce, down from Tuesday's close of 1,120.30-1,121.30 dollars.
In other markets:
-- Seoul lost 0.99 percent, or 16.07 points, to 1,612.83 in thin trade.
-- Singapore fell 0.73 percent, or 20.41 points to 2,762.14.
Genting Singapore, which owns the Resorts World Sentosa casino, ended 1.5 cents lower at 94 cents after rival Las Vegas Sands said it will start gaming operations at its Marina Bay Sands complex on April 27.
Singapore Airlines was up two cents at 14.94 dollars.
-- Taipei fell 0.89 percent, or 67.77 points, to 7,529.67. Taiwan Semiconductor Manufacturing Co was 2.17 percent lower at 58.5.
-- Jakarta shed 0.16 percent, or 4.23 points to 2,579.42.
Bank Danamon declined 2.9 percent, but cigarette maker Gudang Garam climbed 4.1 percent on hopes for strong 2009 results.
-- Kuala Lumpur rose 0.34 percent or 4.35 points to 1,270.78, led by heavyweight counters following better-than-expected earnings.
Dealers said that Malaysia's stronger-than-expected fourth-quarter GDP growth result of 4.5 percent was also positive.
CIMB rose 2.7 percent 13.00 ringgit. Shipping company MISC lost 3.6 percent to 7.95 ringgit.
-- Bangkok edged 0.40 points lower to close flat at 715.18 points.
Banpu and PTT Plc both lost 2.00 baht to close at 532.00 and 231.00 baht respectively.
-- Manila fell 1.06 percent, or 32 points to 2,981.14 points.
Top-traded Ayala Corp. slipped 0.86 percent while Philippine Long Distance Telephone Co. dropped 1.35 percent.
-- Wellington rose 0.14 percent, or 4.52 points, to 3,130.88.
Bargain hunting lifted Telecom two cents to 2.32 dollars and Contact Energy 17 cents to 5.89, dealers said.
--Dow Jones Newswires contributed to this story--
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