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Chinese airline shares plummet on takeover talk as gold and oil hover near record highs on U.S. recession worries MOREINFO: Market activity remained relatively quiet with Japan investors still on holiday, but commodities and China's airline sector kept investors cautious about the year ahead. SCRIPT: Asia airline stocks took centre stage on Thursday. China Eastern Air attempted to sell a stake of itself to Singapore Airlines and the city state's Temasek Holdings. Rumours swirled that Air China, the world's biggest carrier by market value, would launch a rival bid for the company. Air China's parent firm claimed China Eastern was selling itself too cheaply. Shares in Air China fell nearly 9 percent by midday. Although China's air market is booming, China Eastern has lost money for three of the past five years. High fuel costs are one problem for airlines. But Beijing has recently encouraged companies to seek out international expertise and pushed for sector consolidation. Sky high oil prices also had a dragging effect on the airline sector, although oil eased back in Asia trade after tapping a lifetime high above $100 a barrel. Thinning American stockpiles, geopolitical uncertainty and a falling U.S. dollar have put the spotlight on crude prices at the start of the year. Worries about a possible U.S. recession also hurt Asian markets, although Japan remained shut for the New Year holiday. Hong Kong stocks fell for a second straight session. A weak U.S. manufacturing report renewed fears that the world's largest economy was heading toward recession. On the upside gold shares were among the top performers of the day. The precious metal soared to a record high above $850 an ounce with investors seeking safe haven plays. Tara Joseph-Hui reporting for Reuters.