BANGKOK (AP) — Asian stock markets struggled for firm footing Friday as investor nerves were tested by fizzling economic growth in China and the lack of a concrete plan to pull Greece back from the brink of bankruptcy.
Media reports that some of China's biggest banks will miss their annual lending targets for the first time in seven years rattled markets, analysts said. Hesitation to take out loans suggests companies are delaying investment due to uncertainty about the economic outlook.
Japan's Nikkei 225 index rose marginally to 8,568.08. Hong Kong's Hang Seng lost 0.3 percent to 18,609.85 and South Korea's Kospi added 0.4 percent to 1,821.98. Australia's S&P/ASX 200 shed 0.6 percent to 4,033.60.
Chinese economic growth fell to a nearly three-year low of 8.1 percent in the first quarter and factory output in April grew at its slowest pace since the 2008 crisis, raising the threat of job losses and possible political tensions.
On Thursday, a private survey of Chinese manufacturers showed activity weakened further in May. The reports on the slowdown in bank lending were another sign that China's slowdown could be sharper than anticipated.
"This could also pressure China to take action as soon as possible. With this in mind, we wouldn't be surprised to see China announce some new investment projects soon," said Stan Shamu of IG Markets in Melbourne.
Worries were also intensifying over Europe, where seven of the 17 countries that use the euro currency are in recession. Greece will go bankrupt shortly without an international bailout and could exit the euro — a financial event that could harm bigger troubled economies like Spain and destabilize Europe's banks.
Despite potentially disastrous outcomes, European leaders failed to find an agreement on how to fix the financial crisis at their latest summit Thursday.
Among unresolved issues was whether euro countries should issue a collective bond. That would allow every country to borrow funds at the same rate, substantially lowering the costs for the more indebted countries. But Germany, the biggest euro economy, opposes the idea.
"One solution maybe the joint euro bond but of course Germany is against it," said Francis Lun, managing director of Lyncean Holdings in Hong Kong. "And with disagreement in Europe, I doubt the EU's ability to solve its current problem. So, I think that is the uncertainty that everybody is worried about."
The likelihood of Greece leaving the euro has been growing since early May, when political parties opposed to the terms of the country's financial rescue deprived pro-austerity parties of a majority at the polls. New elections are planned for next month.
A Greek election on June 17 could see anti-bailout political parties gain power, which would raise the likelihood of the country leaving the euro.
Among individual stocks, Japan Tobacco Inc. jumped 5 percent a day after announcing an agreement to buy all shares in Belgian tobacco maker Gryson NV this year, news reports said. Japanese retailer Fast Retailing Co., owner of the Uniqlo casual clothing stores, rose 1.7 percent.
But Japanese export shares fell on concerns that a stronger yen will hurt profits.
Sony Corp. sank 5 percent and Sharp Corp. lost 2 percent.
U.S. stocks flipped between gains and losses Thursday. The Dow rose 0.3 percent, to 12,529.75. The Standard & Poor's 500 index edged up 0.1 percent to 1,320.68. The Nasdaq composite index fell 0.4 percent to 2,839.38.
Benchmark oil for July delivery was down 21 cents to $90.45 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 76 cents to settle at $90.66 in New York on Thursday.
In currencies, the euro rose slightly to $1.2528 from $1.2525 late Thursday in New York. The dollar rose to 79.73 yen from 79.58 yen.
