Asian stocks lose ground

TOKYO: ASIAN markets lost ground in early trade on Tuesday after US stocks fell overnight on concerns that the financial crisis is taking a heavy toll on corporate earnings.

China's massive economic stimulus plan failed to boost Wall Street on Monday amid more bad corporate news, including a US$24.5 billion (S$36.7 billion) loss at AIG that forced the US government to expand its bailout of the troubled insurer.

The latest bailout plan, in excess of more than US$150 billion, is the largest in US history.

Tokyo's Nikkei index dropped 3.3 per cent by lunch. Hong Kong share prices opened 2.9 per cent lower while Australian stocks fell 4.3 per cent in morning trade, a day after rising on news of China's fiscal stimulus plan.

Beijing on Sunday announced a US$586 billion package to help boost growth in Asia's second largest economy, has continued to see slowing growth over the past few months.

'The Chinese stimulus package failed to soothe worries about a global recession,' noted NAB Capital economist David de Garis in Sydney. 'While we've had some positive news, there is still plenty to worry about.'

In a fresh sign that the Chinese economy is cooling, inflation hit a 17-month low of 4.0 per cent in October, down from 4.6 per cent the previous month, official figures showed.

Japan said its current account surplus nearly halved in September from a year earlier amid slack export growth and high energy import costs.

Chinese shares edged lower on Tuesday amid losses in other Asian markets and profit taking in local bourses after a 7.3 per cent surge in the previous session, dealers said.

The benchmark Shanghai Composite Index, which covers A and B shares, was down 16.19 points or 0.86 per cent to 1,858.61.