RTTNews - The mood in most markets in the Asia-Pacific region is quite cautious on Thursday amid renewed concerns over the slow pace of global economic recovery.

Markets in Australia and New Zealand opened on a weak note and are still trading sharply lower with stocks across various sectors wilting under selling pressure.

New Zealand unveiled its biggest fiscal deficit in 25 years and forecast up to 10 years of deficits and rising debt in a budget aimed at supporting the economy while averting a credit downgrade. The NZX 50 index of New Zealand is down by 36 points or 1.27% at 2,734.

Energy, materials and healthcare stocks are hammered in the Australian market, with those from the healthcare sector bearing the brunt of the onslaught. Consumer staples, financials and utilities are also seen struggling in the red.

The Australian benchmark index S&P/ASX 200 is currently trading 55.30 points down at 3,746. The broader All Ordinaries index is down by 50.80 points at 3,745.

In Tokyo, stock prices recovered after a sharp fall but are mostly seen struggling for support at higher levels with rising U.S. treasury yields and the likely bankruptcy of U.S. automaker General Motors and its impact on Japanese firm forcing investors on the defensive.

A majority of 114 Japanese companies, 38 of them listed entities, that have some dealings with General Motors Corp. group companies are likely to face difficulty in recovering debt in the event the U.S. auto giant files for bankruptcy.

According to a note by Teikoku Databank Ltd., 102 Japanese companies, including Bridgestone Corp., Denso Corp. and a few others with annual sales of more than 1 trillion yen, might not be able to recover at least some of their accounts receivable with GM if it goes bankrupt.

The Nikkei index of the Japanese market, which was down 7.85 points at 9,431 at the end of the morning session, is currently down by 10.26 points at 9,429. Earlier, the index had opened nearly a percent down from its previous closing mark.

Despite an early surge, the Korean market has drifted lower on selling pressure with concerns over the U.S. economy and the test-firing of nuclear missiles by North Korea weighing in to a significant extent. The likely bankruptcy of U.S. automaker General Motors is proving to be another dampener for the market.

The Korean benchmark index KOSPI, which edged higher to 1,375 earlier this morning, is currently trading at 1,351, down 10.68 points from its previous close. The KOSPI had slipped to its lowest closing value in a month as it settled at 1,362 on Wednesday, posting a loss of 10.02 points for the session.

Bank, oil and shipbuilding stocks are exhibiting weakness. Technology and steel stocks are trading firm but are off their early highs now. Automobile stocks are exhibiting a mixed trend.

The markets in Hong Kong, Shanghai and Taiwan are closed today on account of Tuen Ng Festival.

Most of the Asian markets had ended sharply higher on Wednesday on strong cues from Wall Street. Japan's benchmark Nikkei 225 Index rose 1.4 percent, while Hong Kong's Hang Seng Index jumped by 5.3 percent.

On Wednesday, Wall Street saw some heavy selling as investors chose to take profits amid a mixed report from the housing market and the Treasury Department's auction of $35 billion worth of 5-year notes that attracted moderately strong demand.

The report from the National Association of Realtors said that existing home sales rose 2.9 percent to an annual rate of 4.68 million units in April from a downwardly revised rate of 4.55 million units in March. Economists had expected sales to rise to 4.66 million unit from the 4.57 million originally reported for the previous month.

While the pace of existing home sales increased compared to the previous month, total housing inventories at the end of April represented a 10.2-month supply compared with a 9.6-month supply in March.

The major averages all closed firmly in the red, just off their worst levels of the day. The Dow closed down 173.47 points or 2.1 percent at 8,300.02, the Nasdaq closed down 19.35 points or 1.1 percent at 1,731.08 and the S&P 500 closed down 17.27 points or 1.9 percent at 893.06.

Major European markets posted more modest gains, with the U.K.'s FTSE 100 Index finishing up by 0.1 percent, while the French CAC 40 Index and the German DAX closed up 0.8 percent and 0.3 percent, respectively.

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