(RTTNews) - The stock markets across Asia traded sharply lower for a second straight day on Thursday, tracking the overnight losses on Wall Street and due to lower commodity prices because of a stronger U.S. dollar.

Reports about China tightening lending controls and concerns that central banks worldwide may end some of their stimulus programs soon also affected sentiment.

The underlying mood was cautious as traders awaited the latest reading on U.S GDP growth along with a report on jobless claims for further cues on economic recovery in the world’s largest economy.

Meanwhile, the International Monetary Fund raised Asia’s economic outlook saying that the region is rapidly rebounding from the depth of the global crisis. It now predicts Asia’s gross domestic product or GDP to grow 2.8% this year and by 5.8% next year. In May, the IMF said Asian growth will decelerate to 1.3% in 2009 before rebounding to 4.3% in 2010.

Japan’s benchmark Nikkei closed below the 10,000 mark for the first time in three weeks, as a stronger yen and downbeat earnings outlook for the second-half weighed on sentiment. The Nikkei 225 closed at 9,891, down 184 points or 1.83% and the broader Topix index of all First Section issues on the Tokyo Stock Exchange fell 6 points or 0.74% to 882.

Advantest lost 6.56% after reporting a wider-than-expected loss, TDK Corp fell 2.33%, Toyota Motor edged down 0.83% and Kyocera declined 1.78%, but Canon and Sony showed modest gains

Hino Motors plunged nearly 9% after reporting a first-half loss. Sharp Corp slipped 1.02% ahead of its earnings announcement after market hours.

However, banking stocks advanced sharply, limiting the downside. Mitsubishi UFJ Financial Group rallied 4.50%, Sumitomo Mitsui Financial Group gained 1.61% and Mizuho Financial Group jumped 4.05%.

Brokerage Nomura Holdings edged up 0.47% after posting a better-than-expected third-quarter net profit. Struggling carrier Japan Airlines advanced 2.68% after it sought state aid for a bailout.

The Chinese market fell sharply, dragged down by banking stocks on worries the government may abandon its loose monetary policy soon. The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, dropped 71 points or 2.34% to 2,960 after fluctuating between 2,993 and 2,952.

Market heavyweight PetroChina fell nearly 2%, top lender Industrial and Commercial Bank of China fell over 2% and the country’s largest steel maker Baoshan Iron and Steel gave off 1.6%. Property stocks such as China Vanke and COFCO Property tumbled. Coal stocks also ended considerably lower, but select auto and bio-pharmaceutical stocks closed on a positive note.

Hong Kong’s benchmark Hang Seng fell 497 points or 2.28% to 21,265, tracking lower Chinese shares and due to the uncertainty over the pace of the global economic recovery. Disappointing quarterly earnings from PetroChina dragged down energy stocks.

The South Korean market extended its previous session’s decline, weighed down by weak overseas cues. However, gains in select technology and auto stocks helped cut some initial loss. Commodity-related stocks such as POSCO, SK Energy, and Hyundai Steel bore the brunt of the selling pressure.

The benchmark KOSPI fell to as low as 1,564 in early trading before finishing at 1,585, down 24 points or 1.48%. Volume was moderate and decliners outnumbered gainers by 630 to 177.

Overseas investors offloaded shares worth KRW464.7 billion on a net basis, while domestic investors, including institutions and retail investors, purchased shares worth KRW102.7 billion and KRW325.3 billion, respectively.

The Australian market saw its biggest one-day fall in four months, dragged down by miners and banks.
The benchmark S&P/ASX 200 index closed at 4,575, down 110 points or 2.36% and the broader All Ordinaries index fell 112 points or 2.39% to 4,575.

Big miner BHP Billiton tumbled 3.31% and its rival Rio Tinto slumped nearly 5% in line with the lower metal prices on the LME. Among gold miners, Newcrest shed over 4% and Lihir Gold ended down 2.61% as gold prices fell.

In the energy sector, Woodside Petroleum fell 3.51%, Oil Search edged down 0.67% and Santos fell 2.74% after crude oil prices fell the most in a month on Wednesday.

Among banks, ANZ fell 2.14% after it gave a cautious outlook, Commonwealth Bank fell nearly 3% and National Australia Bank slipped 2.61%. Retailers such as Fairfax and Harvey Norman also ended sharply lower, while defensive stocks, including CSL, Foster’s and Telstra, ended on a positive note.

The New Zealand market closed off the day’s lows as market heavyweight Telecom rose 1.57%. The benchmark NZX-50 index closed at 3,196, down 7 points or 0.22%.

Among top bluechip stocks, Fletcher Building fell 0.72%, Contact Energy slipped 0.16%, Mainfreight gave off 2.03%, Trust Power eased 0.66%, Sky City entertainment edged down 0.58% and the Warehouse Group fell 2.42%.

NZ Oil & Gas declined 2.31% tracking falling crude oil prices. Freightways tumbled 4.76% after its September-quarter revenue and operating earnings slipped by about 5% year-over-year. Auckland International Airport ended down 0.51% after confirming earnings guidance for 2010.

On the flip side, exporter Fisher & Paykel advanced 3.33%, boosted by a lower Kiwi dollar after Reserve Bank Governor Dr Alan Bollard indicated low interest rates will be maintained until the second half of 2010. Bollard retained the official cash rate at 2.5% and added there is ” no urgency to begin withdrawing monetary policy stimulus.”

Resin maker Nuplex rose 1.66%, telecom firm Telstra added 0.61% and carpet maker Cavalier Corp rose 1.63%.

On Wall Street, the major averages closed near their worst levels of the day overnight, mainly due to a disappointing report on new homes sales for September. This caused the dollar to rise and treasuries to gain, while oil and metals fell.

Some selling pressure was also generated by news that Goldman Sachs cut its forecast for third quarter GDP growth to 2.7 percent from 3.0 percent. The third quarter GDP report is due to be released before the start of trading on Thursday. On Wednesday, the Dow fell by 1.21%, the Nasdaq tumbled 2.67% and the S&P 500 ended down 1.95%.

After losing $2.09 or 2.6% yesterday, crude oil prices are currently showing modest gains at $77.59 a barrel.

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