Western gloom has impact on Asian stocks

Asian stock markets mostly struggled to advance today after data showed Europe slipped back into recession and several big US retailers disappointed investors with weak forecasts.

The European Union’s statistics agency said that the combined economy of the 17 countries that use the euro contracted 0.1% in the third quarter from the previous quarter.

Surveys pointing to difficult conditions ahead suggest the recession could deepen.

“Although unsurprising, data in Europe confirmed that the region fell back into recession, an outcome that will do little to ease tensions,” analysts at Credit Agricole CIB in Hong Kong said in an email commentary.

In the US, investors were dealt dual blows: worse-than-expected revenue from global retailing giant Wal-Mart and data showing that manufacturing weakened in the Philadelphia and New York regions, reflecting damage from Superstorm Sandy. Wal-Mart, Ross Stores and Limited Brands, the owner of Victoria’s Secret, also disappointed investors by issuing profit forecasts that fell short of expectations.

Hong Kong’s Hang Seng rose 0.4% to 21,193.50. South Korea’s Kospi fell 0.2% to 1,868,06.

Australia’s S&P/ASX 200 lost 0.2% at 4,341.70. Benchmarks in Taiwan and Singapore fell. Thailand and the Philippines rose.

But Japan’s Nikkei 225 stock index jumped 1.9% to 8,998.76, rallying for a second straight day on expectations that the opposition Liberal Democratic Party may win elections next month and pursue more aggressive stimulus policies than the current leadership.

LDP leader Shinzo Abe has said he is determined to push for such policies and to find ways to weaken the yen, whose strength against other currencies has hammered exporters.

The Dow Jones industrial average closed down 0.2% to 12,542.38. The Standard & Poor’s 500 index fell 0.2% to 1,353.33. The Nasdaq composite index lost 0.4% to 2,836.94.