HONG KONG (Reuters) - Asian shares followed Wall Street lower on Tuesday with resources stocks under pressure as the price of oil stayed below $79 and with investors growing increasingly worried about the recovery of the world economy.
Japan's Nikkei index .N225 was down 1.3 percent with shares in Mitsubishi (8058.T) skidding 4.3 percent as trading houses were hurt by lower oil and commodity prices in the past day.
Oil was at $78.78, below $79 a barrel for a fourth day, amid concerns that a sluggish global economic recovery will limit fuel demand. It hit a year high at $82 last Wednesday.
Investor concern that economic recovery could be slow lent support to the dollar and encouraged profit taking in riskier assets including high-yielding currencies such as the Korean won and the Philippine peso.
The won was nearly 1 percent lower at 1,188.40 to the dollar while the Philippine peso hit a one-month low at 47.30 to the dollar. However, with the world economy recovering and Asian interest rates likely to rise before U.S. rates, analysts saw the dollar rebound, and the falling oil price, as temporary.
"While the U.S. dollar strengthened overnight, we do not think this will be a trend," said Song Kyung-keun, an analyst at Dongbu Securities in Seoul. "To what extent the won and crude prices strengthen are two key uncertainties."
In Australia, shares were down 1 percent with mining giants BHP Billiton (BHP.AX) and Rio Tinto (RIO.AX) were both down 1.7 percent.
The MSCI index of Asia Pacific stocks traded outside Japan .MIAPJ0000PUS was 1 percent lower while the Thomson Reuters index of regional shares .TRXFLDAXPU was down 1.6 percent.
CHINA LIFE GAINS
Investor sentiment was subdued after the S&P 500 .SPX fell 1.2 percent and the Dow Jones industrial average .DJI fell 1 percent on Monday.
Regional economic reports in the United States suggested the world's biggest economy has clambered back to levels associated with the end of recession but recovery will be patchy and may prove fleeting.
Shares in China's leading Internet search company Baidu Inc (BIDU.O) plunged nearly 13 percent after hours in New York after it warned that the transition to a new advertising technology would crimp revenue this quarter.
The Asian earnings picture generally though continues to improve. Shares of Japanese electronics conglomerate Hitachi Ltd (6501.T) jumped 4 percent on Tuesday after the company cut its annual net loss forecast by 15 percent, citing a recovery in emerging markets, government spending and cost cuts.
Shares in China Life Insurance Co (2628.HK), the world's top life insurer by market value, rose 1.7 percent in Hong Kong after the Chinese company's third-quarter earnings more than double.
South Korean government bond prices rebounded as investors went bargain hunting after a recent selloff after a vice finance ministers' cautioned against an early rise in interest rates.
