Asian Markets Fall on Grim Economic Outlook

Asian markets declined Thursday despite U.S. stocks reversing recent losses as a deal to pass a massive U.S. stimulus package is reached. Bank and tech stocks came under pressure as weak corporate earnings and data pointing to a grim outlook for the region's economies weighed on sentiment.

The U.S. dollar was flat against the euro and higher against the yen as U.S. lawmakers edged closer to passing the stimulus package. Crude oil prices fell more than 4 percent in New York trade and is currently trading at the $36 a barrel in the early Asian session.

Japan's Nikkei 225 Average  closed 3 percent lower as disappointment over the U.S. financial rescue plan hit bank stocks. Shares of exporters such as Canon and Sony retreated on a stronger yen. Tech counters such as Advantest Corp also fell after losses by their U.S. peers. But Toshiba bucked the trend, gaining 2.3 percent on news it will buy 221 million worth of shares in Canada's Uranium One with two partners.

The South Korean KOSPI shed 0.8 percent to finish lower for the fourth straight session. The Bank of Korea cut interest rates by 50 basis points to a record low of 2 percent as expected and pointed to deepening economic slowdown. Bank stocks took a beating, weighed down by dismal quarterly results from Woori Finance and KB Financial's Kookmin Bank.

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Australian stocks closed 1.1 percent higher as gains in miners and slightly better than expected employment data gave support to the market. Banking stocks such as CBA rose on news that U.S. lawmakers have reached a deal on economic stimulus package. Shares of Leighton, the country's top construction contractor, jumped following its full-year profit guidance. Miner Rio Tinto was on a trading halt. Rio has agreed to a $19.5 billion cash injection from China's state-owned Chinalco .

Hong Kong's Hang Seng Index shed 2.3 percent, in line with the Shanghai Composite's slide after China released weak trade data for January. Property, bank and telecommunication stocks were mostly lower. 

Taiwan stocks fell 2.4 percent to snap a four-session winning steak, dragged down by DRAM shares despite a report saying the government was studying a plan to set up a firm to consolidate the industry.

Singapore lost 2.3 percent and Malaysia's KLCI fell 0.3 percent.

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