Stock markets head for lackluster end to week

AP and AFP

TOKYO/HONG KONG–Asian stock markets were mostly lower Friday on lingering concerns over the slowing Chinese economy. European shares also headed for a lackluster end to the week.

In early trading, Germany’s DAX was down 0.2 percent at 9,613.58 and Britain’s FTSE 100 edged down 0.2 percent to 6,762.66. France’s CAC 40 was 0.3 percent lower at 4,268.42.

Losses on Thursday in Asia were followed by a sell-off in Europe and New York. U.S. shares were also weighed down by underwhelming corporate results, including from computer maker IBM and defence giant Lockheed Martin. U.S. stocks were poised to fall, with Dow futures down 0.3 percent and broader S&P 500 futures off 0.2 percent. In Asia, markets sank Friday, extending the previous day’s losses after disappointment on Wall Street over data showing the first fall in Chinese manufacturing activity in six months. Japan’s Nikkei share index suffered another bruising day after the yen rallied against the dollar in New York as investors looked for safer investments. Tokyo tumbled 1.94 percent, or 304.33 points, to 15,391.56, Sydney fell 0.42 percent, or 22.1 points, to 5,240.9 and Seoul ended 0.36 percent lower, giving up 7.03 points to sit at 1,940.56.

Hong Kong closed 1.25 percent lower, giving up 283.84 points to 22,450.06 but Shanghai ended up 0.60 percent, adding 12.21 points to 2,054.39. Global markets were sent tumbling on Thursday after HSBC said a preliminary reading of its purchasing managers’ index (PMI) for China fell to 49.6 in January. The index is a closely watched gauge of the health of the Asian economic powerhouse. A reading above 50 indicates growth, while anything below signals contraction. The last time the figure for China dropped below the critical point was in July, when it stood at 47.7. The weak China figures raised concerns about the global economic outlook, which in turn dampened investor appetite for riskier bets. The data from China — a key driver of global growth — fuelled concerns about emerging markets at a time when the U.S. Federal Reserve is winding down its stimulus programme, leading foreigners to repatriate their investments to the West. Eyes will now turn to next week’s meeting of the Fed’s policy committee meeting to see if it announces any further cuts to its giant stimulus program. At its last meeting it said it would trim the bond-buying scheme by US$10 billion a month to US$75 billion from January, citing a pick-up in the U.S. economy. In Hong Kong, Chinese computer maker Lenovo rose 2.9 percent after announcing Thursday that it would buy IBM’s low-end server business for US$2.3 billion.

South Korean electronics giant Samsung ended up 0.62 percent despite reporting its first fall in quarterly profit in two years owing to a one-off bonus, a strong won and slowing sales of its high-end smartphones. Gold fetched US$1,259.60 at 1100 GMT compared with US$1,245.30 late Thursday.