Asian markets mixed as worries wane By CARL FREIRE, Associated Press Writer

Asian markets mixed as worries wane By CARL FREIRE, Associated Press Writer
2 hours, 9 minutes ago



TOKYO - Asian markets were mixed Monday as investors appeared to take another big drop on Wall Street Friday more or less in stride, even as they braced for possible wider fallout from problems in the U.S. housing market.

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Japan's benchmark Nikkei 225 index was down 0.35 percent to 17,223.8 in afternoon trading, after tumbling 2.4 percent Friday. In Hong Kong, the Hang Seng index edged down 0.05 percent at 22,559.47.

But Australia's benchmark index was up 0.24 percent, and Indian shares were higher in morning trading. In China, the Shanghai Composite index was up 0.9 percent at a new intraday record.

A plunge on Wall Street Thursday triggered a global sell-off late last week amid mounting worries that problems in the U.S. subprime mortgage market and higher corporate borrowing costs could crimp growth in the U.S. economy or prompt investors to pull out of riskier assets in emerging markets.

While Asian investors remain concerned about those prospects, Monday's mixed performance could reflect a measure of confidence that regional and global growth will remain strong, analysts said.

"Traders will certainly still be watching what happens on Wall Street this week, but the sense is that as long as it doesn't trigger a more serious economic slowdown in the U.S., the world economy should be able keep growing and help the Asian economies," said David Cohen, director of Asian forecasting at Action Economics in Singapore.

Wall Street slumped again Friday despite figures that showed a surprise rebound in U.S. economic growth during the second quarter. The Dow Jones industrial average slid 1.5 percent, bringing the index's decline for the week to 4.2 percent — the largest percentage drop since late March 2003.

European markets also fell Thursday and Friday, although the losses Friday were smaller.

In Australia, where the benchmark index tumbled 2.8 Friday, traders said the market was relatively calm Monday as bargain-hunting lifted the market into positive territory.

Japanese investors seemed shrug off a big setback for the ruling coalition in Sunday's parliamentary elections, focusing instead on the uncertain outlook for the U.S. market.

As widely expected, Prime Minister Shinzo Abe's scandal-plagued Liberal Democratic Party and its coalition partner lost control of the upper house in the weekend elections. While the ruling coalition still controls a majority of seats in the more powerful lower house, the loss could put pressure on Abe to resign.

Still, the election results did not appear to pose an immediate threat to Japan's steady economic growth.

"U.S. stocks that keep falling on the subprime mortgage woes are more serious for the Japanese market," said Kazuhiro Takahashi, a general manager at Daiwa Securities SMBC.

The yen's recent strength against the dollar, which hurts Japan's exporters, also weighed on sentiment in Tokyo. In currencies, the U.S. dollar was trading at 118.48 yen, down from 118.78 yen late Friday.