Asian stocks eased on Monday with financial shares extending their slide as persistent credit worries offset a positive U.S. employment report, which showed twice as many jobs as expected were added last month.
Investors scurried to the relative safety of government bonds, driving yields lower, and pinned the dollar near a record low versus the euro on worries about losses at big U.S. financial firms.
U.S. banking giant Citigroup said it may suffer an $11 billion write-down for subprime losses and that its Chairman and Chief Executive Charles Prince had resigned.
That is why the market is very dubious today. Everyone is focusing on what is going to happen to Citigroup tonight (in U.S. trade), said Juliana Roadley, market analyst at CommSec in Sydney.
The announcement came just five days after Merrill Lynch ousted its own chief executive, Stanley O'Neal, following an $8.4 billion write-down.
Both gold and oil took a breather after their recent surges, with bullion trading near $800 an ounce, just off Friday's peak of $807.70. U.S. crude was at $95.03 a barrel, within sight of a record high $96.24 set on Thursday.
At 0223 GMT, Tokyo's Nikkei average had fallen 0.9 percent while MSCI's measure of other Asia Pacific stocks declined 0.4 percent.
The MSCI index slipped 0.7 percent last week after losing grip of a record high set on November 1 following a widely expected U.S. interest rate cut.
Hong Kong's Hang Seng Index was among the biggest losers in the region, shedding nearly 1 percent, further pressured by expectations of a delay to a highly anticipated plan to will allow mainland investors to trade directly in the city's stocks.
Chinese Premier Wen Jiabao told reporters during a trip to Uzbekistan that China needed new laws to regulate the outflow of funds to avoid a sudden shock to its stock market.
FINANCIALS HIT AGAIN
Investors continued to sell financials on worries that banks may face further losses from exposure to U.S. subprime mortgage-related assets.
Japan's top bank Mitsubishi UFJ, Australia's newly listed Macquarie Group and South Korea's Kookmin Bank all fell more than 2 percent.
MSCI's index of financial stocks in the region slid 0.8 percent, outpacing declines in the wider market.
Adding to the gloom were concerns about Pakistan, which is bracing for protests against emergency rule.
But bucking the weaker trend, energy firms shone as investors bet that high crude oil prices will boost their profits.
INPEX Holdings climbed 2.4 percent, Australia's Woodside Petroleum gained 0.9 percent and Santos added 3.2 percent.
Shares in PetroChina, the world's second-largest oil producer, made a booming debut in the Shanghai stock exchange, tripling in value to 48.62 yuan at one stage. It's Hong Kong-listed shares, however, eased 0.7 percent.
Citigroup also made a positive debut on the Tokyo Stock Exchange despite the write-down, rising about 5 percent.
On Wall Street, stocks eked out a small gain on Friday following the jobs data, pushing the blue-chip Dow and technology-laden Nasdaq Composite Index modestly higher.
The U.S. Labor Department said the world's biggest economy added 166,000 non-farm jobs in October.
The dollar wallowed near record lows versus the euro and a basket of currencies despite the upbeat jobs data as investors took their cue from losses in major U.S. financial firms, struggling from the credit market problems.
The euro traded at $1.4506, keeping sight of a record high near $1.4530 set on Friday and was at 166.28 yen, within the range of 165 to 167 yen seen in the last few sessions.
Against the yen, the dollar bought 114.63 yen, slipping from near 115 yen in late New York trade on Friday.
The market is looking for some kind of a trigger to accelerate the dollar's fall, so it is not paying much attention to economic data, said a senior trader at a big Japanese trading house.
Safe-haven Japanese government bonds (JGBs) benefited from the flight to safety. The yield on the benchmark 10-year JGB eased 2 basis points to one-week lows of 1.565 percent.