Asian stocks fell, dragging a regional benchmark to its worst weekly performance in almost three months, amid mounting credit-market losses at financial companies and a plunge in the US dollar.
Westpac Banking corp slipped after Citigroup Inc and Morgan Stanley reported mortgage-related losses. Mizuho Financial Group Inc, Japan's second-largest publicly traded bank, slumped after the Nikkei newspaper said a merger of one of the bank's brokerages and Shinko Securities Co will be delayed by subprime-related losses.
"The uncertainty in subprime and further writeoffs in the US banking system would certainly put pressure on stocks here," said Hans Goetti, who oversees US$10 billion as Singapore-based chief investment officer at LGT Bank in Liechtenstein AG.
Nintendo Co, which generated more than a third of its sales from the Americas in the last financial year, led exporters lower on concern a weaker US dollar will erode its US income when converted back to yen.
The Morgan Stanley Capital International Asia Pacific Index lost 3.38 percent to 162.84 this week, the worst decline since the five days ended Aug. 17. All 10 industry groups retreated.
The Mumbai market was closed for a holiday.
Taiwanese share prices closed 0.37 percent higher on a technical rebound after the government apparently lent support to the market.
But dealers said gains were capped by ongoing concerns about the US economy.
"Government support must have helped underpin the market today," said Oliver Fang, assistant vice president at Yuanta Core Pacific Securities (
"Bargain hunting by small investors ... played a lesser role," he said.
Investors refrained from heavy buying after US Federal Reserve Chairman Ben Bernanke cautioned that economic growth would slow noticeably in coming months.
The TAIEX closed up 33.34 points or 0.37 percent at 8,970.92 on turnover of NT$154.44 billion (US$4.8 billion).
The big decline in margin lending positions on Thursday meant many investors were scared enough to cash out of the market, Fang said, adding chances of the index reaching 10,000 points in the near future is increasingly remote.
There was reason to believe that government funds bought into market heavyweights such as Taiwan Semiconductor Manufacturing Co (台積電) to lend support to the market and boost the Democratic Progressive Party's chances in next year's parliamentary and presidential elections, he said.
Japanese share prices fell for a sixth straight trading day, hitting the lowest level in almost three months as credit crunch fears continued to unnerve investors.
Dealers said a stronger yen also hit the share market as a firmer yen has the potential to reduce exporter earnings.
The NIKKEI-225 index fell 188.15 points to 15,583.42.
The losses capped a terrible week that saw the NIKKEI slump 5.7 percent and the TOPIX plunge 6.6 percent.
Share prices closed little changed, up 0.08 percent, after an erratic session, on worries over volatility on Wall Street and new tightening measures in China.
Dealers said property stocks helped the key index finish in positive territory after HSBC and Hang Seng Bank announced quarter point cuts in prime lending rates, making mortgages cheaper.
The Hang Seng Index closed up 23.19 points at 28,783.41.
Kenny Tang, associate director at Tung Tai Securities, said the market trimmed its gains toward the close as investors played safe ahead of the weekend.