HONG KONG – Asian stock markets were mixed Monday, with Tokyo's index off more than 1 percent, as a recent rally over the $827 billion plan to resuscitate the U.S. economy began to fade.
Stocks have advanced strongly of late on expectations the U.S. measure, expected to pass the Senate Tuesday, will reverse the country's deepest recession in decades by stemming massive job losses and increasing spending.
A coming overhaul of the government's $700 billion financial bailout program, to be detailed by Treasury Secretary Timothy Geithner on Tuesday, also has given sentiment a lift. Among new measures under consideration are guarantees to help banks limit losses from their risky assets.
Yet most markets in Asia gave up some of their gains by the afternoon — a sign the euphoria driving global equities higher recently could be short-lived. Analysts says much of the rise has been fueled by investors looking to capitalize on the markets' momentum, not a fundamental shift in sentiment.
"I don't think this rally will last," said Desmond Tjiang, who helps manage $4 billion in Asian equities as a chief investment officer at Fortis Investment Management in Hong Kong.
"There's still bad macro news and bad corporate news that will outweigh the stimulus hopes in the near term," he said. "After the stimulus package, what other good news can there be? I'm just very cautious."
Japan's Nikkei 225 stock average fell 107.59, or 1.3 percent, to 7969.03 and South Korea's Kospi was off 0.6 percent at 1,202.69 while Hong Kong's Hang Seng gained 92.74 points, or 0.7 percent, at 13,747.78.
Stock measures in Australia, China, and India gained while Singapore and New Zealand lost ground.
Also helping markets were Friday's gains in the U.S., where investors looked past abysmal news about the country's job market and instead hoped it would increase pressure on lawmakers to pass the stimulus bill.
The Dow industrials rose 217.52, or 2.7 percent, to 8,280.59 after rising 106 on Thursday. Broader stock indicators also jumped. The Standard & Poor's 500 index rose 22.75, or 2.7 percent, to 868.60.
Wall Street futures sank, suggesting U.S. markets would shed some of last week's gain. Dow futures fell 107, or 1.3 percent, to 8,147 and S&P500 futures were down 14.1, or 1.6 percent, at 853.60.
Some negative news in the region weighed on sentiment.
Japanese machinery orders, a barometer of corporate spending, fell 1.7 percent in December from November. The number was better-than-expected, though economists warned the outlook remains gloomy.
Meanwhile, new figures showed Japan's current account surplus — the broadest measure of Japan's trade with the rest of the world — plunged 92 percent in December from a year earlier, as exports declined amid a deepening global recession.
In stocks, Japan's biggest brokerage firm Nomura Holdings tumbled more than 13 percent on news it might be forced to sell more shares to raise capital.
Stronger commodities prices boosted raw materials producers and the shipping firms that transport their goods. Australia's BHP Billiton Ltd, the world's largest mining company, gained 3.4 percent. Chinese aluminum producer Chalco advanced 5.4 percent in Hong Kong
Oil prices were flat in Asian trade, with light, sweet crude for March delivery exchanging hands at $40.26 a barrel. The contract dropped a dollar to settle at $40.17 a barrel on the New York Mercantile Exchange overnight.
In currencies, the dollar weakened to 91.16 yen, down from 91.83. The euro traded at $1.2925, down from $1.2943.