HONG KONG - ASIAN and European stock markets fell on Friday ahead of a US jobs report that investors fear will reveal massive job losses and point to a deepening recession in the world's largest economy.

After fluctuating in the morning, Asia's bourses trended down later in the session amid mounting anxiety over the closely watched non-farm payrolls data, due out later on Friday in the US.

As the global downturn leads companies to lay off workers and curb hiring, the American economy may have shed 550,000 jobs or more last month, according to forecasters. The unemployment rate may have jumped from 6.7 per cent in November to 7 per cent in December, which would be the highest in more than 15 years.

Steep losses would augur more pain for Asia's export-driven economies, which depend heavily on consumer demand from the US and other Western countries.

Dismal corporate news out of Asia also weighed on investors.

In Japan, electronics component maker TDK Corp. said late on Thursday it would cut 8,000 workers and post its biggest net less ever this fiscal year. South Korean automaker Ssangyong Motor announced on Friday it applied for protection from creditors to buy time to restructure, calling the move an 'unavoidable choice' as it struggles with a liquidity crisis.

'Basically there's not much direction,' said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. 'People still fear the market will go down. All the economic figures show the global economy is in a mess, it's not going to climb out anytime soon.'

As trading opened in Europe, Britain's FTSE 100 lost 0.6 per cent, while Germany's DAX and France's CAC-40 were about 0.5 per cent lower.

Earlier in Asia, Tokyo's Nikkei 225 stock average moved in and out of the green, trading 39.62 points lower, or 0.5 per cent, at 8,836.80 by the close. Hong Kong's Hang Seng Index lost 38.47 points, or 0.3 per cent, to 14,377.44, after rising earlier in the session amid what analysts said was speculation about central government aid for the power sector.

In South Korea, the Kospi shed 2.1 per cent even as the country's central bank cut its key interest rate for the fifth time in just three months to help shore up the country's sagging economy.

Benchmarks in India, Taiwan and Singapore sank, while those in Shanghai and Australia advanced.

Overnight in New York, Wall Street closed mixed after lawmakers and Citigroup worked out a deal that could support the battered housing sector by limiting the number of mortgage foreclosures.

Sentiment was hurt after Wal-Mart Stores Inc. issued a profit warning and reported dismal sales for December, heightening fears that consumers are faring even worse than thought.

The Dow ended down 27.24, or 0.31 per cent, at 8,742.46 after being down as much as 119, but broader stock indicators climbed. The Standard & Poor's 500 index rose 3.08, or 0.34 per cent.

US. futures pointed to losses on Wall Street ahead of the government jobs report. Dow futures were down 31 points, or 0.4 per cent, at 8,665, and S&P500 futures fell 4.4 points, or 0.5 per cent, to 902.30.

Oil prices recovered moderately, with light, sweet crude for February delivery up 24 cents to US$41.94 (S$61.94) a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore.

The contract overnight fell 93 cents to settle at US$41.70.

In currencies, the dollar slipped to 90.66 yen, down from 91.34 yen, while the euro rose to $1.3711 from $1.3699. -- AP