• Asian stocks trade lower on weak US data, anticipated ECB meet


    HONG KONG: Asian markets slipped on Thursday after US stocks tumbled on the back of weak employment and manufacturing data, as dealers eyed a policy meeting of the European Central Bank (ECB) later in the day.

    Tokyo closed down 0.76 percent, or 105.31 points at 13,649.04, Seoul fell 0.34 percent, or 6.74 points to finish at 1,957.21, while Sydney ended 0.70 percent, or 36.2 points lower at 5,130.0.

    Hong Kong fell 0.30 percent or 68.71 points to 22,668.30 while Shanghai was down 0.17 percent, or 3.79 points at 2,174.12, a day after official data showed that manufacturing activity in China slowed last month.

    US markets fell on Wednesday following the release of separate reports showing that job growth eased to its slowest level in seven months in April and that manufacturing activity had slowed sharply in the same month.

    The data came as the Federal Reserve gave a tepid economic outlook at the close of its two-day monetary policy meeting. As widely expected, the Federal Open Market Committee held its key interest rate at zero to 0.25 percent.

    The central bank also kept its $85-billion-a-month bond-buying program in place, but left the door open to step up bond purchases if the economy slowed under the government’s severe “sequester” spending cuts.

    “The Fed’s comments show that the risk of weaker economic growth, accompanied by a ‘disin­flationary’ effect is possible, denting the global economic recovery,” Norihiro Fujito, a strategist at Mitsubishi UFJ Morgan Stanley Securities told Dow Jones Newswires.

    On Wall Street, the Dow Jones lost 0.94 percent, the S&P 500 fell 0.93 percent and the Nasdaq sank 0.89 percent.

    The dollar slipped to 97.19 yen in afternoon Tokyo trade on Thursday from 97.40 yen in New York City on Wednesday afternoon.

    The euro also eased in Asia to 128.01 yen from 128.37 yen, while the single currency was at $1.3167 against $1.3180 in US trade ahead of a policy meeting of the ECB.

    There was speculation that European policymakers meeting in the Slovakian capital of Bratislava would cut interest rates from current record lows, and also unveil new measures to kick-start stymied bank lending.

    European stocks fell in early trade ahead of the ECB decision. London dipped 0.17 percent, Paris eased 0.80 percent, while Frankfurt was flat.

    Chinese shares on Thursday were dampened by the May Day holiday release of the government’s closely watched purchasing managers’ index, which dropped to 50.6 in April, down from 50.9 in March.

    British bank HSBC, whose survey focuses more on smaller enterprises, said last week that its preliminary PMI for April stood at 50.5, also down from a final reading of 51.6 in March.

    The PMI is a widely watched indicator of the health of the Chinese economy, with a reading above 50 indicating expansion, while anything below that points to contraction.

    The April figure marked the seventh consecutive month of expanding manufacturing activity in the country, but was down slightly from a nearly one-year high the month before. Analysts said that it was weaker than expected.



    Please follow our commenting guidelines.

    Comments are closed.