Asian stock markets sag amid economic jitters
HONG KONG: Asian stocks continued to sag Friday, sending Tokyo's index to its eighth straight loss, as uncertainty about company earnings weighed on expectations of a faster turnaround in the world economy. European markets opened lower.
The back-and-forth trade in Asia wrapped up a lackluster week that saw the region's major benchmarks pull back amid concerns the recent rally had overestimated the speed and scale of any rebound in global growth. Oil prices fell below $60 a barrel.
Investors were less than encouraged by the tepid gains on Wall Street, where stocks inched up following aluminum maker Alcoa Inc's narrower-than-expected second quarter loss of nearly half a billion dollars. Weak sales reports from U.S. retailers and more pain in the country's labor market did little to lift the mood.
The markets cratered after last week's troubling signs of growing job losses in the U.S. and Europe led investors to reassess the recovery story that drove a number of markets 30 percent higher or more between March and June.
Now, analysts say there seems to be a lack of direction evidenced by lower volumes and volatility in recent days as many investors await more company results for clues about the economy's prospects or take a break during the summer months.
"I think after the massive rally it's only natural that markets are consolidating now," said Khiem Do, a Hong Kong-based fund manager who helps oversee more than $8 billion in Asian equities at Baring Asset Management. "I think the surprise is that the correction has not been more severe."
As trading got underway in Europe, Britain's FTSE 100 lost 0.3 percent, Germany's DAX was down 0.1 percent and France's CAC 40 dropped 0.3 percent. U.S. stock futures were lower suggesting more losses Friday on Wall Street. Dow futures were down 30, or 0.4 percent, at 8,104 and S&P futures fell 2.3, or 0.3 percent, to 876.70.
Markets in Asia gyrated throughout the day before edging down in the afternoon.
In Tokyo, the Nikkei closed off slightly, losing 3.78 points, or 0.04 percent, to 9,287.28. The benchmark last ended higher on Tuesday, June 30.
The weak trading in Japan came as its central bank said wholesale prices fell 6.6 percent in June from a year earlier — the biggest fall on record and the latest evidence that deflation is returning to the world's second-biggest economy.
Elsewhere, Hong Kong's Hang Seng fell 82.17, or 0.5 percent, to 17,708.42. South Korea's Kospi fell 0.2 percent and Shanghai's index shed 0.3 percent.
Meanwhile, Australia's index gained 0.8 percent and Singapore's market fell 0.2 percent.
In a sign of fading interest in equities markets, at least for now, people continued to pull money from funds that invest in stocks in recent days.
The week ending July 8 saw investors withdraw nearly $1.9 billion from global equities, according to a survey by EPFR Global, a Boston-based firm that tracks global fund flow data. That compared to $2.8 billion the week before.
Funds that invest in so-called emerging markets like China and Brazil, among the best performing in recent months, were also hit with investors yanking about $540 million for the week amid doubts about the recovery's strenghth.
In New York Thursday, the Dow Jones industrial average rose 4.76, or 0.1 percent, to 8,183.17, the second day of modest gains after a 161-point drop on Tuesday. The blue chips crossed zero 108 times during trading.
The broader Standard & Poor's 500 index rose 3.12, or 0.4 percent, to 882.68.
Oil prices were down in Asia, with benchmark crude for August delivery falling 35 cents to $60.06 a barrel after earlier trading below $60. The contract rose 27 cents Thursday.
The dollar dropped to 92.70 yen compared to 93.02 yen. The euro tanked to $1.3914 from $1.4018.