HONG KONG -- Asian stocks outside of Japan fell on Tuesday after a landslide of lower-than-expected US corporate results sparked fears of a pullback in consumer demand, boding ill for the region's exporters.
The US dollar was steady after falling overnight as dealers shrugged off higher-than-expected results from the top two banks Citigroup Inc. and Bank of America Corp. and continued to be skeptical about the stability of the financial sector.
"What really matters is that we're in a bear market and there is no reason to believe that that's going to change in the near future," said Adnan Kucukalic, equity strategist at Credit Suisse First Boston. "Banks are cheap and that's a very good thing but there is no reason for you to get into them in a hurry."
In Japan, a focus on some US bank results that beat forecasts and hopes for industrial companies lifted shares and shed a rare glimmer of light in Asia equity markets, which are entrenched in a bear market, down more than 20 percent from a November all-time high.
The Nikkei share average jumped 1.3 percent as trade resumed after a public holiday on Monday. Shares of Honda Motor Co. rose 2.3 percent and were one of the biggest boosts to the index ahead of the company's results due Friday.
Outside of Japan, shares in the Asia-Pacific region slid 0.3 percent, bringing year-to-date losses to 21 percent, according to an MSCI index.
South Korea's KOSPI slipped 0.3 percent, led by the country's export-dependent technology sector on fears of sharply slowing demand in the West.
Samsung Electronics stock tumbled 2.0 percent and LG Electronics was down 3.5 percent after earnings from Texas Instruments Inc. and SanDisk Corp. that fell short of analysts' estimates.
American Express Co., Apple Inc. and cruise ship operator Royal Caribbean Cruises Ltd. all warned about their results on Monday, suggesting climbing food and energy prices and sluggish economic growth have indiscriminately hit consumers of all income levels.
Investors have been yanking money out of stocks closely tied to discretionary consumer spending and sending it to beaten down sectors and to the healthcare sector.
Last week, funds focused on the consumer goods sector had the highest outflow of equity capital in eight months, while healthcare and biotechnology funds had the best week in more than 18 months, according to EPFR Global, a Boston-based research firm that tracks $10 trillion in assets.
Financial sector and real estate sector funds, two areas that have been battered by the year-old global credit crisis, saw fresh money.
US officials have made it very clear they will do all they can to keep the transmission lines open between the financial sector and home-buyers, reinforcing the belief among a significant number of investors that these sectors -- financials and real estate -- have been oversold, said Cameron Brandt, EPFR Global senior analyst, in a note.
Oil prices pared some of the previous session's gains as tropical storm Dolly looked likely to miss major US oil and gas production facilities, easing fears of supply disruptions from the first big storm threat of 2008.
US light crude fell 67 cents to $130.37 a barrel after gaining more than $3.00 a barrel on concerns over Dolly in the previous session.
The euro was trading around $1.5931 about a cent below an all-time high touched last week. Against the yen, the dollar was down 0.1 percent at 106.33 yen.
Dealing in five derivatives, including Japanese government bond futures and TOPIX futures, was halted early on Tuesday due to system problems, the Tokyo Stock Exchange said. It was unclear when trading would resume.
