Asian shares fall after weak data pushes US stocks lower

Asian shares fall after weak data pushes US stocks lower

HONG KONG - Asian markets slipped 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 later in the day.

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

Hong Kong fell 0.30 per cent, or 68.71 points, to 22,668.30 while Shanghai was down 0.17 per cent, 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 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 per cent.

The central bank also kept its $85-billion-a-month bond-buying programme 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 per cent, the S&P 500 fell 0.93 per cent and the Nasdaq sank 0.89 per cent.

The dollar slipped to 97.19 yen in afternoon Tokyo trade Thursday from 97.40 yen in New York 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 per cent, Paris eased 0.80 per cent while Frankfurt was flat.

Chinese shares 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 it was weaker than expected.

Oil rebounded following recent falls. New York's main contract, light sweet crude for delivery in June was up 40 cents at $91.43 a barrel and Brent North Sea crude for June delivery added 73 cents to stand at $100.68 in afternoon trade.

An ounce of gold fetched $1,455.00 at 1035 GMT, compared with $1,469.05 late Wednesday.

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