By V. Phani Kumar and Rosalind Mathieson
HONG KONG (MarketWatch) -- Most Asian markets fell Thursday as investors remained skeptical about the U.S. economic-stimulus plan. Japanese stocks slid, led mostly by banks and exporters, as trading resumed after a holiday.
Australian shares ended higher, though they came off highs toward the close, as the government's own A$42 billion ($27.3 billion) economic-stimulus plan was rejected in parliament. A vote was tied in the upper house, so the measure fell short of the majority it needed to pass.
The Nikkei 225 Average fell 3% to 7,705.36, playing catch-up to Wednesday's regional declines, with South Korea's Kospi finishing down 0.9%, Taiwan's Taiex losing 2.4% and China's Shanghai Composite slipping 0.6%.
"Investors feel the $789 billion rescue plan can't help the U.S. economic recovery in a hurry. The problem is that the recession there appears to be deepening," said Castor Pang, strategist at Sun Hung Kai Financial.
Hong Kong's Hang Seng ended down 2.3%, while in afternoon trading India's Sensex gave up 1.2% and Singapore's Straits Times lost 1.3%.
/zigman2/quotes/210598065/realtime DJIA 34,265.37, -450.02, -1.30%
Exporters declined in Japan on a mild rise in the yen since Tuesday, with Nikon Corp. /zigman2/quotes/203281219/delayed JP:7731 -0.33% /zigman2/quotes/209396469/delayed NINOY +0.29% down 5.9% and Canon Inc. /zigman2/quotes/207639533/delayed JP:7751 -0.78% /zigman2/quotes/210242912/composite CAJ -0.29% slumping 6.6%.
Banks also lost ground in line with the declines elsewhere in the region Wednesday, with Mitsubishi UFJ Financial Group /zigman2/quotes/207520099/delayed JP:8306 -1.40% shrinking 3.5% and Shinsei Bank /zigman2/quotes/210166295/delayed JP:8303 -0.34% /zigman2/quotes/202811351/delayed SKLKY +0.28% off 6.3%.
South Korean shares shrugged off a 0.5-percentage-point interest-rate cut from the central bank, a move some economists expected. Bank stocks were sold, with KB Financial Group /zigman2/quotes/200043823/composite KB +0.68% down 5.4% and Shinhan Financial Group /zigman2/quotes/208869909/composite SHG +0.25% down 4.8%.
"We expect volatile markets will keep risk-hunters at bay. It is hard to see the real economy finding its footing in the near term," said analysts at UBS.
Australia's S&P/ASX rose 1.2% to 3,514.30 with strong earnings reports and an overnight jump in gold prices lifting stocks, though the index ended way off the day's peak at 3,553.70.
"The markets may see a minor setback here tomorrow, but I don't see the [parliament vote] developing into a major setback," said Jamie Spiteri, head of trading at Shaw Stockbroking in Sydney.
"It's a situation we've seen happen consistently with other governments as they tried to put through these major economic-stimulus packages that just don't meet an immediate bipartisan agreement. ... you may see some alternate strategies to put together a stimulus package, but in a different format," said Mr. Spiteri.
Shares of Westpac Banking Corp. /zigman2/quotes/203084975/delayed AU:WBC -0.62% /zigman2/quotes/206661702/composite WBK -1.73% gained 3% and Commonwealth Bank of Australia /zigman2/quotes/207018701/delayed CBAUF -1.00% /zigman2/quotes/200638713/delayed AU:CBA -1.26% added 3.4%.
Miners gained on stronger gold prices, with Newcrest Mining /zigman2/quotes/203840223/delayed AU:NCM -1.14% /zigman2/quotes/203286036/delayed NCMGY -2.50% up 5.1% and Lihir Gold /zigman2/quotes/225675330/delayed AU:LGL 0.00% surging 8.3%.
Coca-Cola Amatil gained 1.6% after reporting a 24% rise in full-year earnings to A$385.6 million.
Leighton Holdings /zigman2/quotes/206629268/delayed LGTHF +4.55% , Australia's largest construction company, rose 6.1% even as its fiscal half net income fell 56% to A$111.2 million, with the results somewhat better than forecast.
Shipbuilding stocks were on the rise in China after the Xinhua news agency reported the State Council had passed a plan to boost credit facilities for export ship orders.
China State Shipbuilding Co. was up by its daily 10% limit in Shanghai, while Guangzhou Shipyard International Co. /zigman2/quotes/203468429/delayed HK:317 -2.56% jumped 10.5% in Hong Kong.
New Zealand's market was helped by a 0.7% gain in Fletcher Building /zigman2/quotes/200215142/delayed NZ:FBU -0.70% , even as it posted sharply lower first-half earnings and cut its full-year forecast.
"People will take a bit of comfort as they were certainly priced for a lot lower outcome," said Forsyth Barr dealer David Price.
Elsewhere, Malaysia's index fell 0.4%, Philippine shares gained 1.4% and Indonesian shares slipped 0.1%.
Currency markets were fairly quiet, with the U.S. dollar lower at 90.11 yen against 90.46 yen in New York, and the euro at 116.10 yen, compared with 116.68 yen. The euro was near $1.2886, versus $1.2899.
April gold futures, which ended up 3.3% at $944.50 a troy ounce overnight on the New York Mercantile Exchange amid strong trading volumes, were recently down $2.60 to $941.90 an ounce in electronic trading.
March Nymex crude-oil futures gained 10 cents to $36.04 a barrel on Globex, having fallen 4.3% in New York after weak demand propelled U.S. oil inventories to near a 16-year high.