Asian Markets Retreat after Recent Rallies

Asian stocks remained weak in the morning in line with global markets, retreating from the recent highs as investors paused to consider the global economic conditions.

Japan's benchmark Nikkei average index fell 0.51 percent or 63.11 points to 12251.7 while South Korea's KOSPI was down 0.01 percent or 0.29 points to 1993.05. Australia's S&P/ASX 200 slid 0.68 percent or 34.60 points to 5083.3.

China's Shanghai Composite Index was down 0.51 percent or 11.77 points to 2274.8. Hong Kong's Hang Seng index slipped 0.37 percent or 84.55 points to 22806.05.

US stocks had mostly closed lower earlier although the Dow Jones Industrials Average managed to rebound to a record high. Market sentiments were dampened as the UK industrial output showed an unexpected drop in January, giving rise to concerns that the country would slip into another recession.

The Germany's Bundesbank chief Jens Weidmann stoked eurozone concerns further as he said that the debt crisis that had plagued the region was not yet over.

Analysts have pointed out that the current weakness in Asian markets could be more due to overheating concerns after the recent rallies and lack of fresh market-moving news to support sentiments.

But in Japan, concerns set in on fresh political developments. Reports suggest that Japan's largest opposition has objected to the nomination of Kikuo Iwata as the Bank of Japan's deputy governor. Iwata is well known for his strong support for aggressive monetary easing measures.

The dollar which has propelled to record levels against the yen made a moderate retreat during the day, trading at 95.84 yen after having topped the 96 mark earlier this week.

Japanese stocks have gained over 18 percent in the year-till-now buoyed by the government's plans to boost the economy.

South Korean markets sentiments dampened after official data showed that the country's seasonally adjusted jobless rate rose to its highest level in about a year. Unemployment rate rose to 3.5 percent in February more than the 3.2 percent estimated by a Bloomberg survey.

Major Movers

Japanese exporters dropped on the yen's strength. Panasonic fell 3.28 percent while Canon was down 2.11 percent. Olympus Corp eased 1.91 percent.

But camera-maker Nikon traded 5.02 percent higher following Nikkei reports showed that the firm is looking to cut its inventory by 20 percent.

Financial sector traded lower in Hong Kong. Shares of Bank of East Asia were down 2.79 percent while those of Bank of Communications and Bank of China eased 2.36 and 2.19 percent respectively.

Banks were down in Australia as well. National Australia Bank fell 1.90 percent after it announced a cost cutting plan spread over the next five years. Westpac Banking Corp was down 1.70 percent while Australia and New Zealand Banking Group dropped 1.33 percent.