By V. Phani Kumar, Colin Ng & Matthew Allen HONG KONG (MarketWatch) -- Most Asian shares ended lower Wednesday as renewed risk aversion gripped markets after Wall Street's sharp decline, while a downward revision of Japanese economic growth pushed the Nikkei lower. The Nikkei 225 Average ended down 1.3% at 10,004.72, Australia's S&P/ASX 200 fell 0.7%, China's Shanghai Composite dropped 1.7% and Hong Kong's Hang Seng Index lost 1.4%. South Korea's Kospi recovered from early declines to end 0.4% higher and Taiwan's Taiex rose 0.4%. In afternoon trading, India's Sensex fell 0.5% while Singapore's Straits Times Index slid 0.2%. Tuesday's ratings downgrades for Greece and a raft of Dubai government-controlled companies weighed on investor sentiment. "Despite the recovery in the global economy, sovereigns are still under pressure to be downgraded in the coming months. Like the Dubai World default, recent sovereign ratings actions underscore the need for investors to be discerning amongst countries," Brown Brothers Harriman analysts said. The news flow overnight "has once again reminded investors of the fragilities still present within the global economy," said ANZ bank economist Philip Borkin in Wellington. "However, positioning is also clearly playing a role as risk is taken off the table with the year-end approaching." Dow Jones Industrial Average (INDU 10,286, -104.14, -1.00%) futures were 24 points higher in screen trade. Shares in China were dragged down on concerns of capital raising leading to massive stock supply. Industrial Bank (CN:601166 38.99, -1.29, -3.20%) said its shareholders had approved its plan to raise 18 billion yuan ($2.64 billion) in a rights issue to boost the lender's capital adequacy ratio and support rapid lending growth in the next few years. "Concerns over massive refinancing plans are overhanging bank stocks and make it difficult for the general market" to stop falls in the short term, said Shenyin Wanguo Securities analyst Li Xiaoxuan. Industrial Bank ended 3.2% lower, with Industrial & Commercial Bank of China (CN:601398 5.22, -0.08, -1.51%) falling 1.5% and China Minsheng Banking (CN:600016 7.70, -0.14, -1.79%) dropping 1.8% in Shanghai. Japanese stocks fell after third-quarter growth was revised lower to 0.3% year-to-year in real terms, compared with a preliminary estimate for a 1.2% expansion and expectations for a 0.6% result tipped in a Nikkei and Dow Jones Newswires poll. Read full story on Japan's revised Q3 GDP. "Even though corporate profits have picked up, output levels remain very sluggish. Companies aren't confident enough to invest," said Japan Research Institute economist Takuto Murase. Profit-taking also weighed on the market after the Nikkei climbed in six of the previous session sessions. Mitsubishi UFJ Financial Group (MTU 5.59, +0.09, +1.64%) (JP:8306 503.00, +2.00, +0.40%) shrank 5.2%, Sompo Japan Insurance (JP:8755 581.00, -7.00, -1.19%) (SJIIF 6.57, +0.01, +0.20%) fell 0.5% and Komatsu (KMTU.Y 83.75, +0.25, +0.30%) (JP:6301 1,881, -11.00, -0.58%) fell 2.1%. Japanese and Chinese automobile stocks advanced, with Suzuki Motor (JP:7269 2,290, 0.00, 0.00%) (SZKMF 26.35, +2.25, +9.34%) ending up 3.5% in Tokyo after Chief Executive Osamu Suzuki confirmed the auto maker was negotiating an alliance with Germany's Volkswagen (VLKA.Y 23.22, -0.93, -3.85%) . After the market closed, Suzuki and Volkswagen announced a long-term strategic partnership. In Shanghai, FAW Car (CN:000800 26.34, +2.13, +8.80%) jumped 8.8% in Shenzhen and SAIC Motor (CN:600104 25.94, +0.17, +0.66%) added 0.7% after data showed that news passenger vehicle sales in China nearly doubled in November from a year earlier. Hong Kong shares were hurt by further losses in heavyweight HSBC Holdings (HK:5 88.20, -2.35, -2.60%) (HBC 57.12, -1.54, -2.63%) , which dropped 2.6%, and a 4.2% tumble in Standard Chartered (HK:2888 182.20, -7.90, -4.16%) (SCBFF 23.65, -1.15, -4.64%) shares, on lingering Dubai credit fears. Commodity-related shares fell across the region on overnight declines in gold and crude-oil prices. In Tokyo, shares trading houses Mitsubishi Corp. (MSBH.Y 49.59, +0.23, +0.47%) (JP:8058 2,235, +10.00, +0.45%) and Marubeni (MARU.Y 54.23, -0.17, -0.31%) (JP:8002 485.00, -5.00, -1.02%) dropped 1.6% and 2.9%, respectively. BHP Billiton (BHP 72.70, -2.17, -2.90%) (AU:BHP 40.55, -0.50, -1.22%) fell 1.2% and Rio Tinto (AU:RIO 70.90, -1.00, -1.39%) (RTP 200.55, -6.86, -3.31%) shed 1.4% in Sydney, Jiangxi Copper (JIXA.Y 101.00, -2.00, -1.94%) (CN:600362 41.44, -1.20, -2.81%) (HK:358 19.00, -0.74, -3.75%) dropped 3.8% in Hong Kong and 2.8% in Shanghai. In Seoul, Daewoo Shipbuilding (DWOT.F 27.62, -0.56, -2.00%) gained 4.4% on news KDB Financial Group had begun the process to sell its controlling stake in the company. Exporters advanced further on hopes for improved outlook for 2010, with Hynix Semiconductor (HXSCF 17.40, +0.02, +0.09%) rising 2.2% and Hyundai Motor (HYMT.F 17.50, 0.00, 0.00%) climbing 3.3%, while Samsung Electronics (SSNLF 655.80, -28.98, -4.23%) added 0.8%. In foreign exchange markets the euro was at $1.4731 from $1.4704 in late New York trade Tuesday, after earlier dropping to $1.4689. Against the Japanese currency, the euro was trading for 129.03 from 129.87 yen, while the dollar bought 87.56 yen from 88.36 yen. The British pound was also sold off and touched a low of $1.6166. It was recently at $1.6235 from $1.6276 in late New York. "Dollar bulls may be feeling more confident after [the] dollar rally extended another day. U.S. interest rate expectations will be a key determinant for the dollar near-term," said Brown Brothers Harriman analysts in a note. Japanese government bonds were higher after the weaker-than-expected GDP result. The lead December futures contract gained 0.27 to 140.36 points, while the 10-year cash JGB yield was down 2.5 basis points at 1.240%. Spot gold was at $1,135.20 per troy ounce, up $6.90 from the New York close. Nymex January crude oil futures gained 91 cents at $73.53 per barrel on Globex.

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