HONG KONG - MOST Asian stock markets fell Monday, as new figures showed Japan's economy contracted the most in 35 years and Group of Seven finance ministers warned the global slump will drag on through most of the year.

The fourth quarter GDP numbers out of Japan, worse than many forecasts, was a sobering reminder of the toll on Asia's export-driven countries as world demand collapses amid the worst economic downturn in decades. According to the government, the world's second-biggest economy shrank 3.3 per cent from the previous quarter, or at an annual pace of 12.7 per cent.

Investors also seemed disappointed after finance chiefs from the Group of Seven developed countries finished their meeting in Rome with pledges to work together to boost growth and unemployment, but stopped short of concrete measures.

Increasingly, investors are unconvinced governments around the world are acting quick enough to solve the credit crisis, plummeting consumer demand and other problems at the heart of the economic slowdown, analysts said.

'The global recession is deeper than anticipated. At the same time policy makers are failing to deliver measures to address the problems,' said Dariusz Kowalczyk, chief investment strategist for SJS Markets in Hong Kong. 'It seems that what they're doing is too little too late.' Japan's Nikkei 225 stock average edged down 22.45 points, or 0.3 percent, to 7,756.95, and Hong Kong's Hang Seng Index dropped 231.84 points, or 1.7 percent, to 13,322.83. South Korea's Kospi lost 1.4 percent to 1,176.23.

Markets in Australia, India and Singapore also declined, while benchmarks in Shanghai and Taiwan gained.

In Japan, exporters were down on data showing the economy sank deeper into recession.

The result represents the steepest drop for Japan since the oil shock of 1974 and outpaced annual pace declines of 3.8 per cent in the US and 1.1 per cent in the euro zone. A survey of economists by Kyodo news agency had projected an 11.6 percent contraction.

'It's clearly very shocking data,' said Clive McDonnell, head of Asia strategy at BNP Paribas Securities in Hong Kong. 'The drop is certainly beyond our own quite negative expectations. (Japan's) policy response has not been as effective.' -- AP

TOKYO
Japanese share prices ended narrowly mixed on Monday after the government said the economy suffered its worst contraction in almost 35 years in the last quarter of 2008.

The benchmark Nikkei-225 index lost 29.23 points, or 0.38 per cent, to end at 7,750.17. The broader Topix index of all first-section shares added 5.51 points, or 0.72 per cent, to 770.10.

SHANGHAI
Chinese shares closed up 2.96 per cent on Monday led by securities firms, which were riding high after last week's rally boosted trading volumes, dealers said.

Steel makers also led the broad market rally on media reports that China will soon release plans to revive the sector, traders said.

The benchmark Shanghai Composite Index, which covers A and B shares, rose 68.60 points to 2,389.39 on turnover of 177.9 billion yuan (S$39.4 billion).

The Shanghai A-share index gained 72.21 points, or 2.96 per cent, to 2,508.56 on turnover of 177.5 billion yuan, while the Shenzhen A-share index advanced 14.80 points, or 1.88 per cent, to 803.85 on turnover of 91.1 billion yuan.

HONG KONG
Hong Kong share prices closed 0.7 per cent lower on Monday, led by falls in banking stocks ahead of their annual earnings reports, dealers said.

The benchmark Hang Seng Index ended 98.79 points down at 13,455.88.

Turnover was HK$34.59 billion (S$6.71 billion).

Bank of East Asia, which will release its annual results on Tuesday, plunged 4.1 per cent to US$15.56.

KUALA LUMPUR
Malaysian shares fell 0.3 per cent on Monday due to profit-taking in selected bluechips including Tenaga and Maybank, dealers said.

The Kuala Lumpur Composite Index lost 2.65 points to close at 907.19. -- AFP