HONG KONG - ASIAN markets were lower on Monday as world finance leaders gave a grim forecast for 2009 despite US President George W. Bush offering a multi-billion-dollar lifeline to the auto industry.

Traders had been lifted by the announcement at the weekend of the US$13.4 billion (S$19.4 billion) bailout for two of the Big Three automakers but soon fell away as concerns for the global economy returned.

Sydney closed 1.6 per cent down while Hong Kong was 3.3 per cent and Seoul closed 1.36 per cent lower. Shanghai lost 1.8 per cent and Taipei 1.5.

However, Tokyo was 1.57 per cent up despite the government saying for the first time in almost seven years that the outlook for the world's second biggest economy was getting worse.

The last time it used such negative language was in February 2002.

As industrial production and corporate profits deteriorate, 'the economy is likely to continue worsening for the time being,' the Cabinet Office said in its monthly report.

Earlier Tokyo released data showing a record drop in exports as the worst global financial crisis in decades bites deeper and a strengthening yen make it harder to sell overseas.

Japan reported a trade deficit of 223.4 billion yen (S$3.62 billion) in November as exports fell at their fastest-ever rate, the finance ministry said.

The economy 'stepped up the pace of its decline last month but is falling head over heels this month,' said Mr Hiroshi Watanabe, economist at Daiwa Institute of Research.

'Japan has been hit by an unprecedented, sudden change in climate,' he said.

The trade deficit, which compared with October's deficit of 67.7 billion yen, reversed a surplus of 784.4 billion yen a year earlier, even though imports fell for the first time in 14 months.

And a survey in the Nikkei economic daily Monday showed 99.3 per cent of chiefs at Japan's 137 major corporations believe the domestic economy is deteriorating.

On Sunday International Monetary Fund (IMF) chief Dominique Strauss-Kahn predicted a 'very dark' 2009 that could be worse than expected if states did not take sufficient action.

'Our forecasts are already very dark, but they will be even darker if not enough fiscal stimulus is implemented,' he told BBC radio in London, predicting recession for advanced economies and decreasing growth for emerging ones.

And Bank of Spain governor Miguel Angel Fernandez Ordonez was even more pessimistic, warning the world faced a 'total' financial meltdown unseen since the Great Depression of the 1930s.

Traders had been given a boost after Mr Bush on Saturday unveiled the long-awaited bailout for General Motors and Chrysler to save them from imminent bankruptcy and stave off the loss of hundreds of thousands of jobs.

'These are not ordinary circumstances,' Mr Bush said in announcing the aid.

'In the midst of a crisis and a recession, allowing the US auto industry to collapse is not a responsible course of action.' The move rallied Wall Street briefly before the Dow closed 0.38 per cent lower, although the tech-heavy Nasdaq added 0.77 per cent.

President-elect Barack Obama on Sunday announced plans to make a further 500,000 jobs on top of the 2.5 million previously pledged with a stimulus plan that could cost US$850 billion over two years.

Vice president-elect Joseph Biden on Sunday said: 'What we're doing is putting together what we think will be the economic package that will do two things. One, stem the hemorrhaging of the loss of jobs, and begin to create new jobs.'

Meanwhile, China pledged to help Taiwanese companies amid the credit crisis, offering US$19 billion of financing over the next three years to boost the island's firms working on the mainland.

On Sunday five of the seven bourses in the Middle East closed sharply lower as the global financial crisis begins to impact the region while weaker demand for energy brings down the price of oil. -- AFP

KUALA LUMPUR
Malaysian shares closed 0.3 per cent lower on Monday due to profit-taking in selected bluechips, dealers said.

Dealers said volume was thin ahead of the traditional year-end holidays, adding that the bourse was likely to trade within the 870-890-points band on Tuesday.

The Kuala Lumpur Composite Index lost 2.97 points to close at 873.43.

Volume was 305.70 million shares valued at 449.69 million ringgit (S$185 million) while losers led gainers 243 to 212.

Dealers said the bourse lacked new leads to boost investors' buying interest.

'There was some evidence of window dressing Monday but there's likely to be more next week just before the year-end,' one dealer told Dow Jones Newswires.

National carrier Malaysian Airlines was down 6.8 per cent at 2.89, MMC Corp. lost 1.5 per cent at 98.5 sen and Maybank shed 2.9 percent to 5.10.

IOI Corp gained 2.2 per cent to 3.64 ringgit, Gamuda added 3.3 per cent at 1.89 and Resorts World rose 1.4 per cent at 2.24.

Tenaga Nasional was flat at 5.90 ringgit while Telekom Malaysia added one per cent at 3.02.

SHANGHAI
Chinese shares closed down 1.52 per cent on Monday on profit-taking following last week's gains and worries over weak corporate earnings in the fourth quarter, dealers said.

The benchmark Shanghai Composite Index, which covers A and B shares, closed down 30.71 points to 1,987.76 on turnover of 60.4 billion yuan (S$12.7 billion).

The Shanghai A-share index lost 32.31 points, or 1.52 per cent, to 2,087.32 on turnover of 60.3 billion yuan, while the Shenzhen A-share index was down 1.05 points, or 0.16 per cent, at 654.23 on turnover of 35.5 billion yuan.

HONG KONG
Hong Kong share prices closed 3.3 per cent lower on Monday, as heavyweight China Mobile pulled down the main index and investors took profit after a two-week surge, dealers said.

The benchmark Hang Seng Index closed down 505.12 points at 14,622.39.

Turnover was light at 36.49 billion Hong Kong dollars (S$6.78 billion).-- AFP, BERNAMA, REUTERS