Asian markets mixed on weak economy, earnings

BANGKOK, Thailand (AP) -- Asian markets were mixed Friday, with Japanese stocks sinking amid dismal economic numbers and a string of quarterly reports from leading companies like Sony and Honda showing plunging profits.

Hong Kong's key index edged higher on speculation about an interest rate cut in mainland China or other stimulus measures. European markets rose in early trade as Wall Street futures strengthened.

Markets had logged some gains earlier in the week, buoyed by an upbeat earnings outlook from British lender Barclays and a $819 billion stimulus package in the U.S. moving closer to reality, but confidence soured in Asia on bad economic and corporate news, especially out of Japan, Asia's biggest economy.

"Investors are looking for a magic bullet but there isn't one. There isn't one solution that by itself can solve all the complex problems that the world economy faces," said Arjuna Mahendran, head of Asian investment strategy at HSBC Private Bank in Singapore.

"In typical myopic fashion, markets are alternating between despair and hope," he said. "The problem is that there is no real visibility about earnings and the economic situation and there may not be until the second half of this year or very late in the year."

Japan's Nikkei 225 stock average fell 257.19, or 3.1 percent, to 7,994.05 as investors reeled from a mounting pile of bad earnings reports and the latest economic data, which showed industrial production falling at a record pace and unemployment jumping.

Hong Kong's Hang Seng clawed back early losses to rise 0.9 percent to 13,278.21. South Korea's Kospi retreated 0.4 percent while markets in Singapore and the Philippines also lost ground. Australia's main index gained 0.4 percent. Markets in mainland China are closed all week for the Lunar New Year.

As trading got under way in Europe, France's CAC-40 rose 0.3 percent, Germany's DAX gained 0.1 percent and Britain's FTSE 100 rose 0.6 percent.

U.S. stock index futures were moderately stronger. Dow futures were up 38 points, or 0.5 percent, to 8,150, and S&P 500 futures were up 4.9 points, or 0.6 percent, at 847.70.

Industrial output at Japan's manufacturers plunged 9.6 percent from the previous month in December, the largest drop since Tokyo began measuring such data in 1953. The unemployment rate in the world's second-biggest economy jumped to 4.4 percent in December from 3.9 percent the previous month.

Honda Motor Corp. dived 9.2 percent ahead of quarterly results. The automaker's October-December profit, released after the market closed, tumbled 90 percent, hit by rising costs, a stronger yen and falling sales in key markets.

Megabank Mizuho Financial Group Inc., which had a quarterly loss of 50.55 billion yen ($559 million), slid 7.4 percent.

Electronics gaint Sony Corp., which Thursday reported a 95 plunge in October-December profit, sank 6.8 percent.

Toshiba Corp. tumbled 17.4 percent in the wake of forecasting a full year loss due to plummeting demand for its flash memory chips, used to store data in consumer gadgets like music players and digital cameras.

China stocks rallied in Hong Kong as speculation of a weekend interest rate cut by the mainland's central bank and other stimulus measures swept the market. Such rumors are frequent and often come to nothing.

"There are hopes for more stimulus measures because the authorities in China have said they are determined to stabilize the economy," said Castor Pang, an analyst at Sun Hung Kai Financial in Hong Kong.

China Telecom added 6.7 percent and insurer Ping An Insurance jumped 6 percent.

On Wall Street Thursday, the Dow Jones industrial index slid 2.7 percent to 8,149.01, while the S&P 500 index dropped 3.3 percent to 845.14.

Oil languished below $42 a barrel in Asia as more dismal U.S. economic numbers offset news that OPEC may further cut production. Light, sweet crude for March delivery rose 40 cents to $41.84 a barrel by midafternoon in Singapore in electronic trading on the New York Mercantile Exchange.

In currencies, the dollar fell to 89.40 yen from 89.92 late Thursday in New York, while the euro declined to $1.2870 from $1.2934.