Asian stocks fall, taking breather from rally, as global recovery prospects mulled

Asian stocks fall as recovery prospects mulled

TOKYO — Asian stocks edged lower Monday as investors assessed whether recent signs of improvement in the recession-hit global economy justify the enormous rally in markets since March.

Over the weekend, finance ministers from the Group of Eight industrialized nations, meeting in Italy, acknowledged “signs of stabilization in our economies.” But they also said it was too early to withdraw massive fiscal and monetary stimulus because the fallout from the financial and economic crisis wasn’t over.

Investors have welcomed recent signs that the recession has bottomed — pushing world stock indexes up 35 percent or more in the past four months — but remain cautious about how definitive any upturn may be.

Japan’s Nikkei 225 stock average lost 96.15 points, or 1 percent, to 10,039.67. On Friday, the index finished above the psychologically important 10,000-point level for the first time since October 7, 2008.

Hong Kong’s Hang Seng slipped 366.87, or 1.9 percent, to 18,522.81 and South Korea’s ended 1.1 percent down at 1,412.42.

Linus Yip, a strategist at First Shanghai Securities in Hong Kong, said markets were entering a “consolidation” stage as investors adopt a wait-and-see stance to economic developments.

After recent big gains “the momentum is decreasing,” he said.

In Tokyo, worries remained that overseas stock markets would decline in coming sessions.

“Hitting the 10,000 mark was one key step, and so some people are going to want to sell at that point, while others are going to want to buy,” said Yutaka Miura, senior strategist at Mizuho Securities Co. in Tokyo.

Elsehwere, China’s Shanghai index bucked the regional trend to rise 1.7 percent to 2,789.55 while Singapore’s market fell 1.7 percent.

In oil, prices fell below $71 a barrel Monday in Asia as a three-month rally lost steam amid a strengthening dollar.

Benchmark crude for July delivery was down $1.08 to $70.96 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. On Friday, it fell 64 cents to settle at $72.04.

In currency trading, the dollar was trading at 98.44 yen, adding to a rally from last week that lifted it to 98.40 in New York on Friday. The euro fell to $1.3885 from $1.4015.