Japanese shares fell sharply on Monday after some downbeat economic data, while Chinese markets edged higher, but most other indexes declined amid worry about the U.S. “fiscal cliff." Japan's Nikkei Stock Average closed 0.9% lower, as South Korea's Kospi slipped 0.2%, Taiwan's Taiex lost 0.4%, and Australia's S&P/ASX 200 index declined 0.3%. A series of above-forecast economic data allowed China to buck the trend, however, with the Shanghai Composite Index and Hong Kong's Hang Seng Index each gaining 0.2%. The losses in many of the Asian markets came after U.S. stocks closed Friday with modest gains but still ended the week lower amid the possibility of more than $600 billion of tax hikes and spending cuts — the so-called “fiscal cliff" — which some economists fear could tip the U.S. into a recession. U.S. investors are now more concerned about the 2013 outlook “in the wake of current strained negotiations in Washington," said Matthew Sherwood, head of investment market research at Perpetual Investments/ But while “uncertainty over resolving the U.S. fiscal cliff continues to cast a long shadow over markets," as Credit Agricole put it, recent days have also seen the release of a slew of better-than-expected Chinese economic data. After strong industrial output and retail sales numbers Friday, data over the weekend showed China's trade surplus widened to $32 billion from $27.7 billion in September, above the $27 billion surplus expected by economists surveyed by Dow Jones Newswires. China's exports rose 11.6%, beating expectations for a 10% increase, while imports rose 2.4%. Overall, “after seven consecutive quarters of moderating growth, the Chinese economy appears set to rebound in the fourth quarter of 2012, although the improvement will be modest," said Sherwood at Perpetual. Hong Kong shares benefiting from rising exports moved higher Monday, with Li & Fung Ltd. , up 1.6%; ports operator Cosco Pacific Ltd. , ahead by 1%; snack-food maker Want Want China Holdings Ltd. , higher by 2.6%; and footwear firm Belle International Holdings Ltd. up 2%. The Chinese data contrasted with Japanese data out Monday showing its economy shrank 3.5% on an annualized basis in July-September, with weakness for exports — particularly for cars and computer chips — reportedly helping drive the contraction. Japanese exporters traded mostly weaker after the data, also suffering from foreign-exchange rates as the U.S. dollar remained below the 79.50-yen level Monday. Among Japanese tech-exporter majors, Sony Corp. fell 2.6%, while Hitachi Ltd. traded down 2.2%, and Toshiba Corp. retreated 1.8%. As for auto makers, Isuzu Motors Ltd. fell 2.4%, Toyota Motor Corp. declined 1.8%, and Honda Motor Co, lost 1.3%.. The Nikkei reported Saturday that Japan's auto sector could take a ¥130 billion ($1.64 billion) profit hit, after exports to China were damaged by recent Sino-Japanese tensions over a group of disputed islands. Not all car makers traded lower, however, with Suzuki Motor Corp. rallying 4.5% after posting more than 30% profit growth for the fiscal first half, and Mazda Motor Corp. gaining 1% after sealing a deal to make cars for Toyota at its plant in Mexico. In South Korean trading, shipbuilders were some of the worst performers, with Hyundai Heavy Industries Co. down 3.8%, Samsung Heavy Industries Co. down 2.4% and Daewoo Shipbuilding & Marine Engineering Co. dropping 4%. Samsung Electronics Co. edged up 0.2%, however. A report in Korea's Chosun Ilbo said Monday that Samsung had managed to force arch-rival Apple Inc. to pay 20% more for Samsung mobile processors. Meanwhile, HTC Corp. jumped 6.9% in Taipei after the firm settled all of its patent litigation with Apple, according to reports. In Australia, QBE Insurance Ltd. tumbled 8.3% after it estimated its share of losses from U.S. storm Sandy would range between $350 million and $450 million. QBE believes total insured losses for the industry from the storm could exceed $20 billion. QBE will raise $500 million from issuing debt. Shares of Oil Search Ltd. fell 3.4% after an Exxon Mobil Corp. unit that operates a liquefied-natural-gas project in Papua New Guinea — which counts Oil Search as a partner in the venture — raised cost and schedule estimates for the project. Oil Search is required to contribute an extra $300 million of equity to the project. Marketwatch
