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Asian equities traded lower on Friday, after Wall Street closed in the red as investors digested comments from the Fed and the European Central Bank (ECB).

Overnight, Fed chair Janet Yellen said in a testimony before Congress that economic data since October backs the central bank's expectations of an improved job market. She added the bank will need to be cautious about raising rates form near zero, but added that - even after an initial increase - Fed funds rates would remain accommodative.

The Dow Jones Industrial Average ended 252 points or 1.42 percent lower at 17,478 while the S&P 500 was down 30 points or 1.44 percent at 2,049. The Nasdaq was down 86 points or 1.7 percent at 5,038.

Elsewhere, ECB president Mario Draghi announced monetary policy measures that fell short of market expectations.

The central bank cut deposit rate by 10 basis points to negative 0.3 percent and said its asset purchase program will also be extended until at least March 2017 and broadened in scope.

Anatoli Annenkov, senior European economist at Societe Generale said in a note "While theories of a pushback from other Governing Council members to the Executive Board's recent dovish messages will flourish, it may simply reflect the conclusions the tasked ECB committees arrived at: that the recovery continues, that monetary policy is effective and that the new measures are judged enough."

On the data front, investors will focus on the US nonfarm payrolls report for November due later in the day.

China market down 1 percent

The Shanghai Composite traded down 42 points or 1.1 percent at 3,544 as investors remained cautious.

Chinese finance stocks were in the red with brokerages seeing losses between 1 and 2.6 percent. Huatai Securities and China Merchants were down 2.6 percent.

Shares in major banks were down over 1 percent, with shares in Bank of China seeing a steep loss of 3 percent.

Properties were also in negative territory, with the likes of Vanke, Shanghai Shi Mao, Gemdale, and Poly Real Estate seeing losses of over 2 percent.

Oil producers were also affected despite an uptick in oil prices.

Overall sentiment in China's economy remain cautious. Bank of America Merill Lynch said in a recent note that data from November will continue to be mixed and show some growth headwinds. The note said, "Industrial production (IP) and fixed asset investment (FAI) growth could still be sluggish due to the lack of demand pick up amidst poor weather in the month, while retail sales growth data will likely demonstrate the relative resilience in consumption."

Already, China's Purchasing Managers Index (PMI), a measure of manufacturing activity, fell below expectations.

Japan, South Korea markets weighed by ECB decision

The sell-off contagion from overnight spread to Asia as the Japanese and South Korean markets continued with losses in morning trade.

Japan's Nikkei 225 hit a three-week low, down 350 points or 1.76 percent at 19,589 and trading mostly in the red across the board.

The yen traded marginally higher against the euro.

Investor focus will be on the recent announcement of a three-way merger between Toshiba, Fujitsu, and Sony's PC spin-off business Vaio.

The Nikkei reported the trio are considering an integration of their PC operations which would give them upwards of 30 percent of the Japanese marketshare, surpassing market leader NEC Lenovo Japan. It would also make them a notable global competitor.

Shares in Sony were down in morning trade by 2.2 percent, Toshiba saw losses of 0.79 percent, while Fujitsu was up by 2.33 percent.

In the South Korean market, the Kospi continued its losing run to trade 17 points or 0.87 percent lower at 1,977.

Blue chip shares were all firmly in the red. Shares in Samsung Electronics were down 1.24 percent, steel manufacturer Posco was down 0.87 percent while Kepco saw losses of 1.33 percent.

ASX trades firmly in the red

The Australian market opened the final trading day of the week in the red. The main ASX 200 index was down 90 points or 1.72 percent at 5,138.

Banking stocks were firmly in negative territory, down between 1.7 and 3.1 percent; shares in ANZ traded 3.06 percent lower.

Resources producers were trading mixed early morning. Shares in Rio Tinto and BHP Billiton, two of Australia's biggest miners, were down 2.6 and 1.5 percent. Overnight both stocks saw a big sell off in the London stock market on the back of the ECB decision.

Gold stocks received a boost in morning trade after further indication of a Fed rate hike from Janet Yellen sent the precious metal soaring. Overnight, spot gold was up USD 1,061.76 an ounce. Shares in Newcrest saw gains of near 2.1 percent, Evolution Mining up 1.3 percent, Kingsgate up 1.44 percent, and Alacer Gold up 0.95 percent.

Oil producers had a mixed reaction to upticks in US crude and Brent.

prices overnight. West Texas Intermediate (WTI) futures were up USD 1.14 or 2.85 percent at USD 41.08 while the internationally traded Brent was up USD 1.43 or 3.37 percent at USD 43.94 per barrel.

Santos saw gains of 1.9 percent while Oil Search and Woodside Petroleum were down over 1 percent each.

The Australian Bureau of Statistics also released the retail sales numbers for October, which saw 0.5 percent in turnover on-month, in line with expectations. Retail shares traded mixed with shares in Myer, an upmarket department store chain, up 1.5 percent.

First Published:Dec 4, 2015 8:08 AM IST