Stocks in Asia sink on fears that Chinese economic stimulus may end

Stocks closed lower in Asia Thursday, as investors speculated that China might tighten the reins on the financial stimulus it has pumped into the economic system. An announcement that the Chinese economy grew 8.9 percent last quarter ignited concerns that inflation might follow such swift expansion. The Shanghai Composite Index fell 0.6 percent to 3,051, Hong Kong's Hang Seng ended the day at 22,211 losing 0.5 percent and Japan's Nikkei Index slid 0.6 percent to close at 10,267.

The possibility of the Chinese government tightening up its monetary policy sent shivers across the South China Sea to Hong Kong where stocks slid for a second day. Clothing company Esprit Holdings (ESHDY) declined 2.6 percent after announcing an 8 percent drop in sales for the first quarter. Li & Fung Ltd. (LFUGY) fared even worse falling 3.4 percent despite its massive contracts to supply clothes and toys to Wal-Mart and Target.