(MENAFN - AFP) Asian stocks fell sharply Friday following losses on Wall Street as fresh doubts emerged over the prospects for US-China trade talks and global growth outlook.
Tokyo led the slump, while Hong Kong returned from the three-day Lunar New Year break also in the red as investors reacted to negative signals from the US ahead of next week's crunch trade negotiations in Beijing.
US President Donald Trump told reporters he did not expect to meet Chinese counterpart Xi Jinping before the March 1 deadline, when US duties on many Chinese goods are due to jump.
Top White House economist Larry Kudlow further doused expectations by saying Washington and Beijing are a "sizeable distance" apart in talks, adding that no date for a US-China summit has been set.
Analysts say Trump meeting with Xi ahead of the cut-off would make a meaningful deal more likely, although the difficulty of matching schedules had been flagged in advance with the US president flying to Vietnam to meet North Korea's Kim Jong Un later this month.
Economists say the imposition of the tariffs could weaken the global economy after a brief rally at the start of 2019.
"Share markets have had a great rebound from oversold conditions in December and are now up against technical resistance and getting overbought," Shane Oliver, head of investment strategy at AMP Capital, told Bloomberg.
"Meanwhile a bunch of balls remain up in the air regarding the trade war, the US shutdown and slowing global growth. So there is a high risk of a pull back from here."
Tokyo closed down 2.0 percent, while Hong Kong shed 0.3 after paring heavier early losses.
Seoul lost 1.2 percent, Jakarta 0.4 percent and Manila 0.3 percent. Shanghai and Taipei remain closed for the week.
- Gloomy outlook -
Meanwhile, the Reserve Bank of Australia became the latest central bank to slash growth forecasts, citing the effects of a weaker housing market.
It said growth would reach 2.5 percent in the middle of this year, well down from the 3.25 percent it previously projected.
Sydney lost 0.3 percent in Friday trading, while the Australian dollar also fell.
Earlier, the European Commission slashed its eurozone growth forecast for this year on an unexpected slowdown in Germany, tensions over lacklustre growth prospects in Italy, and French protests.
The commission, the EU's executive arm, is now expecting growth of 1.3 percent in the eurozone this year, a significant cut from 1.9 percent predicted in November.
The pound and euro slipped after EU President Donald Tusk warned there was "no breakthrough in sight" in Brexit talks, and the Bank of England also cut its UK growth forecast while keeping interest rates unchanged.
"Many of the central banks are reacting to the fact that the global economic situation has worsened," Komal Sri-Kumar, founder and president at Sri-Kumar Global Strategies Inc., told Bloomberg TV.
Gold and the safe-haven yen edged up on the sombre outlook. The US dollar strengthened against most currencies, as oil prices slipped.
- Key figures around 0620 GMT -
Tokyo - Nikkei 225: DOWN 2.0 percent at 20,333.17 (close)
Hong Kong - Hang Seng: DOWN 0.3 percent at 27,914.86
Shanghai - Composite: Closed for a public holiday
Euro/dollar: DOWN at $1.1340 from $1.1342 at 2150 GMT Thursday
Dollar/yen: DOWN at 109.68 yen from 109.83 yen
Pound/dollar: DOWN at $1.2946 from $1.2948
Oil - West Texas Intermediate: DOWN 37 cents at $52.27 per barrel (from 52.64)
Oil - Brent Crude: DOWN 35 cents at $61.28 per barrel (from 61.63)
New York - Dow: DOWN 0.9 percent at 25,169.53 (close)
London - FTSE 100: DOWN 1.1 percent at 7,093.58 (close)