Asian shares fell on Friday, weighed down by tech stocks after lacklustre sales outlooks from some sector heavyweights and as worries about the fiscal health of Greece and Portugal undermined investor confidence.
A massive recall of millions of vehicles by the world's top car maker Toyota added to concerns over corporate earnings after poor outlooks from Motorola and Qualcomm dented optimism for the technology sector.
Samsung Electronics, the world's top maker of memory chips and LCD screens, failed to lift the gloom despite ts forecast-beating earnings as the region's shares head for their worst monthly decline since early 2009.
Asia Pacific stocks outside Japan as measured by MSCI struck a two-month low with the technology index down 1.8 per cent and the material index 2.6 per cent lower.
Fresh worries over public finances of Greece, Portugal and other smaller euro zone countries dragged the euro down to a six-month low against the dollar and a nine-month low versus the yen, a trend which has gained momentum as investors cut risk trades funded by the yen and dollar.
"Debt concerns in Europe, earlier-than-expected normalisation of Chinese monetary policy and disappointing economic data in the U.S. are all adding up to force a number of investors to cut their positions," said Khiem Do, head of the Asia multi-asset group at Baring Asset Management.
According to data from fund tracker EPFR Global, emerging markets equity funds saw their first week of net outflows in the period ended January 27 after 11 weeks of inflows as investors pared back their exposure amid fears of slowing growth in China, where authorities are reining in bank lending.
US equity funds saw their biggest weekly outflow since late June while European equity finds suffered net redemptions for the third week in five, the data showed. Bond funds, meanwhile, saw inflows, particulalry emerging market local currency-denominated bonds.
The strength of the yen currency also hammered Japanese stocks, which received a further setback after Toyota announced it would extend to Europe and China a recall of millions of vehicles due to faulty accelerator pedals and floor mats.
Japan's Nikkei average fell 1.6 per cent hit, by negative earnings surprises from firms such as chip equipment maker Advantest Corp which came on the back of Nippon Steel Corp's warning of a first annual net loss in seven years.
US stocks fell by as much as 1.9 percent overnight after both Qualcomm and Motorola reported earnings and outlooks that fell short of expectations. Qualcomm shares tumbled 14.2 per cent and Motorola slid 12.4 per cent.
Several tech bellwethers this quarter have beaten modest expectations and still have been viewed unfavorably by the market, so the dismal reports were viewed even more negatively.
Fears that Athens will not be able to service its heavy debt also unnerved investors and prompted them to shun riskier investments, including stocks, although the country's prime minister said it has not asked for a bailout.
Reuters
