Asian markets fell this week as investor sentiment turned negative with concerns of an economic slowdown in China, Japan and South Korea.

Japan's Nikkei 225 Stock Average fell 3.3 percent this week and closed at 8724.12. Japan's core machinery orders, which measure the change in the total value of new orders placed with machine manufacturers, excluding ships and utilities, slumped in May. The data released by the Japanese Cabinet Office Monday shows that core machinery orders slumped to 14.8 percent in May, down from a 5.7 percent increase in April.

South Korea's Kospi Index was down 2.4 percent and closed at 1812.89. The Bank of Korea (BoK) cut its policy rate by 25 basis points to 3 percent Thursday, after leaving it on hold for twelve consecutive meetings in a row. Market players were rather discouraged by this decision as it hinted at an uncertain economic growth in the country. Adding to market participants' woes was the report that South Korea’s economic growth forecast was reduced by the Bank of Korea to 3 percent this year, down from the prediction of 3.5 percent made in April.

India's BSE Sensex dropped 1.7 percent for the week and closed at 17213.70, even though India’s index of industrial production grew at 2.4 percent in May, up from a decline of 0.9 percent in April.

Hong Kong's Hang Seng Index declined 3.6 percent and it closed at 19092.63. China's Shanghai Composite Index fell 1.7 percent and it closed at 2183.90.

China's trade surplus rose in June compared to the same month last year with the weakening of imports. Data released by the General Administration of Customs of the People's Republic of China Tuesday show that trade surplus rose to $31.73 billion in June up 42.9 percent compared to the the same month last year.

The data released Friday by the National Bureau of Statistics shows that China’s gross domestic product grew at 7.6 percent in the second quarter of 2012 compared to the same period an earlier year. Market participants feel it is imperative to have stimulus measures to regain growth momentum.

The U.S. Federal Open Market Committee (FOMC) released Wednesday the minutes of its June 19-20 meeting. A few members expressed the view that further policy stimulus likely would be necessary to promote satisfactory growth in employment and to ensure that the inflation rate would be at the Committee's goal, the FOMC said. Investors were concerned that additional monetary easing measures from the Fed are unlikely unless the global economy worsens.

Investors continued to have concerns about the debt burden faced by the euro zone. Moody’s Investors Service cut the Italian government's bond rating to Baa2 down from A3. The reasons for the downgrade, it says, are the deterioration of economic prospects in Italy and its inability in implementing reforms.

Major losers:

Shares of Samsung Electronics fell 1.9 percent. Shares of Dentsu Inc dropped 9 percent. Shares of ZTE Corp slumped 16 percent.

Week Ahead:

The underlying short-term trend remains down as investor sentiment may continue to be negative unless there are bold moves by central banks to announce stimulus measures. The markets are expected to be bearish for the next week in the absence of any step to rejuvenate the global economic growth.