Asian stock markets sank for a second day Friday as expectations hardened that China will take additional steps to cool its scorching economic growth, as AP reported. Oil prices languished under $90 a barrel after a big fall the day before on increased expectations that China, the world's biggest energy consumer, will be more aggressive about tamping down persistent inflation. In currencies, the dollar was lower against the yen and the euro. Some of the region's commodity companies, which depend heavily on Chinese demand, were hit hard. Japan's Nikkei 225 stock average lost 1 percent to 10,331.17. Trading houses, metals producers and miners declined. Major trading firm Mitsubishi Corp. tumbled 3.9 percent and rival Mitsui & Co. lost 3.3 percent. Australia's S&P/ASX 200 dropped 0.5 percent to 4,758. Mining giant BHP Billiton Ltd. was down 1.2 percent. Hong Kong's Hang Seng fell 0.2 percent to 23,957.82 and South Korea's Kospi shed 1.4 percent to 2,076.75. The key index in Singapore also declined, by 0.2 percent to 3,197.88. Chinese shares _ which took a beating Thursday _ bucked the trend, with the benchmark Shanghai Composite up 1.9 percent to 2,717.17. New Zealand shares also rose. Notable gainers included Japan's NEC Corp., which jumped 2.1 percent in Tokyo. The buying was triggered by local media reports that the company is nearing a deal with China's Lenovo Group Ltd. to form a PC joint venture. NEC said in a statement no decisions had been made. It also declined to comment on whether the two companies are in talks. Stock markets from Shanghai to London to New York fell Thursday after China reported that its economy grew by 9.8 percent in the fourth quarter and that inflation remained stubbornly high. The numbers triggered worries that the world's second-largest economy _ and the main driver of global economic growth in recent years _ would force itself to slow down to control prices by raising bank interest rates or reserve requirements. Chinese inflation has become «a key issue for global markets,» according to a report issued Friday by Bank of America Merrill Lynch Global Resesarch. «Manufactured export prices are rising again, as domestic costs _ especially unskilled wages _ are passed down the supply chain,» the report said. «China's competitiveness is adjusting through cost and wage inflation, rather than currency appreciation.» Sean Darby, chief Asia strategist at Nomura International in Hong Kong, said wages were also being driven up by shortages of skilled labor _ increasingly in demand as China and other developing nations cater to domestic demand as well as compete in export markets with more sophisticated products. Markets would be «reasonably cool» early in 2011, Darby said. «People's attention is going to be on the front-loading of rate hikes» by central banks in China and elsewhere. Most commodity prices fell Thursday, with silver leading metals lower with a 4.6 percent decline. The Dow Jones industrial average fell 2.49 points, or less than 0.1 percent, to 11,822.8. The negative mood was tempered by slightly better news on the U.S. jobs market. The Labor Department reported that the number of people filing first-time claims for unemployment benefits fell to 404,000 last week. The broader Standard & Poor's 500 index lost 1.66, or 0.1 percent, to 1,280.26. The technology-focused Nasdaq composite index fell 21.07, or 0.8 percent, to 2,704.29. In currencies, the dollar dropped to 82.90 yen from 82.98 yen late Thursday. The euro rose from $1.3472 to $1.3486. Benchmark crude for March delivery was down 13 cents to $89.46 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost $2.22 to settle at $89.59 on Thursday.
