Asian stocks lost ground on Friday as investors worried about a broadening global economic slowdown, with sentiment not helped by the absence of any positive signs for a resolution in the US-China trade row.
MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.7 per cent, easing back from a four-month peak touched the previous day.
MSCI index is a global provider of equity, fixed income, hedge fund stock market indexes and multi-asset portfolio analysis tools.
Hang Seng – Hong Kong’s stock-market index - lost 0.8 per cent and KOSPI - stock market index of South Korea - retreated 1.2 per cent. Japan's Nikkei tumbled 1.6 per cent.
The European Commission on Thursday sharply cut its forecasts for euro zone economic growth this year and next, stoking fears a global slowdown is spreading to Europe as businesses and investors grapple with trade frictions.
Adding to the gloomy mood, US President Donald Trump said he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline to achieve a trade deal.
“Investors are getting nervous as the market had been optimistic about a resolution of the trade dispute since the beginning of the year," said Shusuke Yamada, chief Japan FX and equity strategist at Bank of America Merrill Lynch.
Trump's stance rattled investors hoping for a resolution to the months-long trade dispute between the world's biggest economies. Wall Street shares also slumped in response overnight, with the Dow, one of the most watched stock indexes in the world, falling 0.9 per cent to pull back from a two-month peak scaled midweek on upbeat corporate results.
"With many of the corporate earnings out of the way, equities appeared ready for a correction after their recent highs," said Masahiro Ichikawa, senior strategist at Japan-based Sumitomo Mitsui Asset Management.
"Equities will face further hurdles next week, as (US treasury secretary Steven) Mnuchin and (trade representative Robert) Lighthizer will be visiting China. Brexit talks are also in focus."
Mr Mnuchin and Mr Lighthizer are expected to kick off another round of trade talks in Beijing next week to push for a deal to protect American intellectual property and avert a March 2 increase in US tariffs on Chinese goods.
Updated: February 8, 2019 05:45 PM