Nervous Asian markets fall further

HONG KONG: Asian stock markets slipped further on Friday after sharp falls on Wall Street and higher-than-expected Chinese inflation data, even as oil prices eased back.

Tokyo's Nikkei was down 0.83 percent, Sydney plunged 1.44 percent, Hong Kong was 0.94 percent lower and the Shanghai Composite Index was off by 0.22 percent.

The falls came after steep losses on Thursday, when Shanghai lost 1.50 percent, and on Wall Street, where the Dow, Nasdaq and S&P 500 indexes all ended down more than 1.8 percent.

Markets were nervous not only about the intensifying conflict in Libya, but also about unrest in OPEC oil lynch pin Saudi Arabia, where activists were calling for a "Day of Rage" on Friday.

Also hitting sentiment was the worsening European debt crisis and, closer to home, Chinese data that showed inflation hit 4.9 percent in February, raising expectations of yet another interest rate hike. The latter prospect sent Chinese banking stocks tumbling.

However oil prices actually eased somewhat due to Europe's debt troubles -- amplified by a downgrade of Spain by ratings agency Moody's -- and due to data showing that China experienced a rare trade deficit in February.

Both factors suggested the possibility of slower activity both in the eurozone and in economic powerhouse China. "Overnight there has been very mixed news on the global economic front that put downward pressure on oil," said Victor Shum, senior principal for Purvin and Gertz international energy consultants in Singapore.

Benchmark crude prices held above the $102 level in Asian trade after easing off two-year highs. New York's main contract, light sweet crude for April delivery, rose 14 cents to $102.84 per barrel. Brent North Sea crude for April delivery dipped 23 cents to $115.20.

The euro rebounded against the dollar, having plunged earlier following the Spanish ratings downgrade. The euro fetched $1.3817 in Tokyo morning trading, compared to 1.3794 in New York late Thursday. The single European unit rose to 114.44 yen from 114.31. The dollar fell to 82.83 yen from 82.91 yen.

Gold opened at $1,414.00-$1,415.00 an ounce in Hong Kong, down from its Thursday close of $1,427.00-$1,428.00.(AFP)