Asia stocks dip on Dow drop, China data cuts loss

Associated Press
FILE - This April 22, 2010, file photo, shows a Wall Street sign in front of the New York Stock Exchange. U.S. stocks slumped Thursday, July 31, 2014, as investors reacted to disappointing corporate earnings reports and assessed the implications of the approaching end to economic stimulus from the Federal Reserve. (AP Photo/Mark Lennihan, File)
.

View photo

FILE - This April 22, 2010, file photo, shows a Wall Street sign in front of the New York Stock Exchange. U.S. stocks slumped Thursday, July 31, 2014, as investors reacted to disappointing corporate earnings reports and assessed the implications of the approaching end to economic stimulus from the Federal Reserve. (AP Photo/Mark Lennihan, File)

HONG KONG (AP) — Most Asian stock markets dipped on Friday following a big sell-off on Wall Street but losses were limited by optimistic reports on China's economy.

KEEPING SCORE: Japan's benchmark Nikkei 225 index dropped 0.6 percent to 15,528.72 and Hong Kong's Hang Seng fell 0.5 percent to 24,623.81. South Korea's Kospi was 0.2 percent lower at 2,071.75. Australia's S&P/ASX 200 tumbled 1.4 percent to 5,554.40. In mainland China, the Shanghai Composite Index edged up 0.2 percent to 2,205.40.

US SELL-OFF: Asian stocks are lower after U.S. markets had their worst day in months. Factors include weak corporate earnings from big companies such as Exxon Mobil as well as the approaching end of stimulus from the Federal Reserve. Economic sanctions on Russia that have increased tensions with the West also played a role, as did Argentina's debt default Wednesday. And there's also the general worry by investors that stocks are overpriced.

ANALYST VIEW: Desmond Chua of CMC Markets in Singapore said Asian markets fell despite healthy China manufacturing figures as investors took profits following strong rallies by many benchmarks over the past week or two. "Investors are sitting on sidelines and holding on to cash waiting for more events to unravel before buying on the dips," said Chua. While he expects a "slow and gradual climb" in Asian markets based on economic fundamentals, "we haven't seen a pullback in a long time and with valuations at such extensive levels I wouldn't be surprised if we get one in due time."

CHINA'S FACTORIES: Upbeat data on Chinese manufacturing helped put a floor under Asian stocks. Monthly surveys of manufacturing in China signaled that the world's second biggest economy perked up further in July thanks to recent mini-stimulus measures. An official purchasing managers' index rose to its highest in 27 months while a similar factory report by HSBC showed the strongest rate of improvement in a year and a half.

ECONOMIES IN FOCUS: Investors will get more clues about the state of the global economy with the release of a raft of economic reports later in the day, starting with manufacturing data for major eurozone economies. After that, reports are expected on U.S. employment, consumer spending and sentiment, construction spending and manufacturing. The forecast for the much scrutinized employment report is that U.S. employers added 225,000 jobs in July and that the unemployment rate remained at 6.1 percent, the lowest since 2008. In June, the economy added 288,000 jobs.

WALL STREET: The Dow Jones industrial average fell 1.9 percent to 16,563.30, its worst one-day drop since February. The S&P 500 dropped 2 percent to 1,930.67, its biggest loss since April. The Nasdaq composite fell 2.1 percent to 4,369.77.

LOW ENERGY: Benchmark U.S. crude for September delivery slipped 15 cents to $98.02 a barrel in electronic trading in New York. The contract on Thursday fell $2.10 to close at $98.17, its lowest level since March 17. Brent crude, a benchmark for international oils used by many U.S. refineries, edged 3 cents lower to $105.99 in London.

CURRENCIES: The euro drifted down to $1.3386 from $1.3391 late Thursday. The dollar rose to 102.93 yen from 102.78 yen.

View Comments (2)