Friday, May 18, 2012

Asia stock markets sink on US, Europe worries

(AP) ? Asian stocks dived Friday after discouraging U.S. economic reports unnerved investors already worried about the stability of the 17-country euro currency union.

Japan's Nikkei 225 tumbled 2.4 percent to 8,660.23 as signs of weakness in critical export markets battered some of the country's behemoth manufacturers.

Hong Kong's Hang Seng slid 2.1 percent to 18,802.45 and Australia's S&P/ASX 200 dropped 2.2 percent to 4,064.40.

South Korea's Kospi sank 2.5 percent to 1,798.36. Benchmarks in Singapore, Taiwan, mainland China and New Zealand also fell.

Asian shares followed U.S. stocks, which closed lower Thursday after a report showed manufacturing slowed in the mid-Atlantic region for the first time in eight months, and was far below analyst estimates.

"Most of the attention is on Europe where the big risks still lie. But the U.S. is grinding at a 2 (percent) sort of growth rate and while that's better than in Europe, things are slowing down, not speeding up," analysts from DBS Bank Ltd. in Singapore said in an email. "The situation is precarious."

The Federal Reserve Bank of Philadelphia said its index of factory activity fell to minus 5.8 from 8.5 in April. Any reading below zero indicates contraction.

Measures of new orders and employment also fell in May, the bank said. That suggests manufacturers in the region are cutting jobs.

Among individual stocks, Japanese auto makers were hit hard. Toyota Motor Corp. lost 3.5 percent and Isuzu Motors Ltd. fell 4.2 percent.

Gold miners were among the gainers. Australia's Newcrest Mining jumped 5.5 percent on rising prices for the precious metal. Hong Kong-listed Zijin Mining Group Co., China's largest gold miner, rose 3.4 percent.

The Dow closed down 1.2 percent at 12,442.49. The Standard & Poor's 500 index was down 1.5 percent at 1,304.86. The Nasdaq composite index fell 2.10 percent to 2,813.69.

Benchmark oil for June delivery was up 3 cents to $92.59 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 25 cents to settle at $92.56 in New York on Thursday.

In currencies, the euro fell to $1.2683 from $1.2714 late Thursday in New York. The dollar rose to 79.41 yen from 79.28 yen.

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Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson

Associated Press

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