HONG KONG - ASIAN stocks fell on Friday, with Japan's benchmark tumbling almost 4 per cent, as grim news about major companies like Microsoft and Sony underscored the depth of the worst global slowdown in decades. European markets fell in early trade amid news the British economy had officially slid into recession.

Every major market in Asia retreated, giving up most of the gains from the previous session when investors shrugged off gloomy economic data about China and Japan and sent stocks higher.

The growing corporate woes - which highlighted the beating some of the world's richest and best-managed companies were taking amid the global slump - weighed on sentiment across Asia.

In the US, investors were stunned by news software giant Microsoft Corp was slashing 5,000 jobs - the first mass layoffs in its 34-year history - and had suffered an 11 per cent drop in profit last quarter.

Things were similarly bleak across Asia, where Japan's Sony Corp projected its first annual net loss in 14 years and job cuts. In South Korea, Samsung Electronics, the world's largest manufacturer of flat screen televisions and memory chips, posted its first ever quarterly loss Friday as the slowdown hit prices.

Adding to the gloom, US unemployment and housing data released overnight was worse than expected and pointed to further deterioration in the world's largest economy.

Shortly after European trading started, figures showed the British economy was in a recession after a 1.5 per cent contraction in the fourth quarter.

'I don't see any signs of revival in the economy this year, definitely not,' said Mr Peter Lai, investment manager at DBS Vickers in Hong Kong. 'There are too many uncertainties, too much negative news. I don't think the worst is over.'

In Europe, Britain's FTSE 100 shed 1.5 per cent, Germany's DAX lost 2.4 per cent and France's CAC-40 was down 2.4 per cent.

Earlier in the day, Japan's Nikkei 225 stock average dropped 306.49 points, or 3.8 per cent, to 7,745.25. Hong Kong's Hang Seng Index eased 0.6 per cent to 12,578.60, while South Korea's Kospi sank 2.1 per cent to 1,093.40 points.

Elsewhere, Australia's main index dived more than 4 per cent, Shanghai's benchmark was down 0.7 per cent and Singapore's stock measure lost 0.6 per cent.

With Wall Street futures falling, US markets were poised to open lower. Dow futures fell 170 points, or 2.1 per cent, to 7,922 and S&P 500 futures lost 19.70 points, or 2.4 per cent, to 805.80.

Throughout Asia, the region's bellwether companies were among the worst hit.

Shares of Sony tumbled 7 per cent to their lowest level in a month. Nippon Steel Corp, Japan's biggest steelmaker, lost 5 per cent after saying it would cut production by the largest amount in its four-decade history as auto demand gets squelched by the global slowdown.

Toyota Motor Corp shed 1.6 per cent on news it's considering slashing more than 1,000 full-time jobs in North America and the United Kingdom.

In South Korea, Samsung dropped 3.9 per cent after the company posted a loss of 20 billion won (S$21.7 million) in the three months ended Dec 31. The company earned 2.21 trillion won a year earlier.

Overnight losses in US and European markets contributed to declines in Asia.

Investors in the West were disheartened by news US construction of new homes and apartments slid 15.5 per cent last month, closing out the worst year for builders since at least 1959. Meanwhile, first-time applications for unemployment benefits jumped last week to 589,000, the most since 1982.

Following a volatile session, the Dow closed down 105.30, or 1.3 per cent, to 8,122.8. Broader market indexes recovered some of their losses but still dropped, with the Standard & Poor's 500 index off 12.74, or 1.5 per cent, at 827.50.

Oil prices were lower, with light, sweet crude for March delivery fell US$1.28 to US$42.39 a barrel in Asian trade. The contract rose overnight 12 cents settle at US$43.67.

In currencies, the dollar sank to 88.17 yen from 89.03 yen late on Thursday. The euro was lower at US$1.2780 compared to US$1.3001. -- AP

TOKYO
Japanese share prices closed down 3.81 per cent on Friday, hit by overnight losses on Wall Street and Sony's forecast of a record loss, dealers said.

The benchmark Nikkei-225 index dropped 306.49 points to 7,745.25. The broader Topix index of all first-section shares shed 22.36 points, or 2.81 per cent, to 773.55.

SHANGHAI
Chinese shares closed down 0.71 per cent on Friday in thin trading ahead of the Lunar New Year holidays, with some blue chips leading the decline amid worries over weak earnings, dealers said.

The benchmark Shanghai Composite Index, which covers A and B shares, closed down 14.29 points to 1,990.66 on turnover of 62.9 billion yuan (S$13.87 billion).

The Shanghai A-share index shed 15.11 points, or 0.72 per cent, to 2,089.90 on turnover of 62.7 billion yuan, while the Shenzhen A-share index lost 3.04 points, or 0.47 per cent, to 641.97 on turnover of 32.2 billion yuan.

HONG KONG
Hong Kong share prices closed 0.6 per cent lower on Friday, as investors stayed away ahead of the Lunar New Year holiday, dealers said.

The benchmark Hang Seng Index moved in and out of negative territory during the day, ending down 79.39 points at 12,578.60. Turnover was light at HK$33.72 billion (S$50.83 billion).

KUALA LUMPUR
Malaysian share prices closed down 0.7 per cent on Friday amid weak sentiment ahead of the upcoming Lunar New Year holidays, dealers said.

The Kuala Lumpur Composite Index fell 6.33 points to close at 872.69 points with a turnover of 277.13 million shares worth RM388.36 million ringgit (S$161.49 million).

There were 210 gainers, 221 losers and 189 counters unchanged.

'Volume traded was very thin with investors seeking to unwind positions ahead of the long weekend,' a dealer told Dow Jones Newswires.

'There weren't any positive catalysts to drive the market higher,' he added.

Among decliners, TM International fell 1.8 per cent to RM3.32 while Sime Darby dropped 0.9 per cent to RM5.35.

On the upside, Ranhill rose 5.5 per cent to RM0.87 and Public Bank was up 0.6 per cent to RM8.65. -- AFP