Spain's credit rating downgrade spooked markets in Japan on Thursday as worries deepen about the global slowdown's impact on company earnings.

Standard & Poor's cut Spain's debt rating to one level above junk, citing concern about the government ability to tackle the persistent debt crisis. The downgrade comes a day after the International Monetary Fund reduced its global growth forecasts for 2012 and 2013 as the US and Eurozone's economic woes hamper and already fragile global economy.

The benchmark Nikkei 225 index closed down 49 points at 8,546 while the Hang Seng advanced 79 points at 20,999 in Hong Kong.

Stocks on the move included robot maker Fanuc which tumbled 2.8% in Tokyo on concern about slowing demand. Elsewhere car giant Toyota Motor reduced 1.4% after it announced a recall of over 7m vehicles because of a faulty window switch. Rivals Nissan surrendered 1.4% while Honda eased 0.7%.

In domestic economic data, Japan's machinery orders fell 3.3% in August compared to a 4.6% increase in July, official data showed today. August's figure was in line with forecasts. Mitsubishi Materials fell 2.6% after the data.

IT stocks shrugged off an otherwise gloomy market on hopes of increased demand for PCs, tablets and smartphones. Shares of semiconductor firm Advantest bounced 5% while Tokyo Electron beefed up almost 2% after it posted a better than expected increase in second-quarter orders.

In Hong Kong Lenovo added 1% after Gartner listed the group as number one in the world for personal-computer sales.

Heavyweight Hong Kong listed banks enjoyed plenty of interest on Thursday. Shares of Industrial & Commercial Bank of China rose 2.7% while Bank of China increased 1.7%. Agricultural Bank of China pushed 2% higher and China Construction Bank climbed 1.5%.

Stocks in Australia fell despite stronger than expected jobs data as mining stocks headed south. The national statistics bureau said the number of people employed in Australia rose by 14,500 in September.


CJ

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