Asian markets dip as China’s service sector hits a low

Men walk by an electronic stock board of a securities firm in Tokyo on July 24, 2014. Asian stocks slipped Tuesday after an HSBC report showed the performance of China’s service sector fell to a record low in July, and despite a positive lead from Wall Street. AP PHOTO/EUGENE HOSHIKO

HONG KONG–Asian stocks slipped Tuesday after an HSBC report showed the performance of China’s service sector fell to a record low in July, and despite a positive lead from Wall Street.

The HSBC China services Purchasing Managers’ Index in July slipped to 50.0, the dividing line between expansion and contraction, down from 53.1 in June.

“The weakness in the headline number likely reflects the impact of the ongoing property slowdown in many cities, as property-related activity, such as agencies and residential services, see less business,” Qu Hongbin, HSBC Chief Economist for China, said in a statement.

Tokyo’s Nikkei fell 1.00 percent or 154.19 points to close at 15,320.31, Sydney dropped 22.3 points, or 0.40 percent, to finish at 5,518.6, and Seoul shed 0.68 percent, or 14.16 points, to end at 2,066.26.

Hong Kong closed up 0.20 percent, or 48.18 points, to 24,648.26, while Shanghai slipped 0.15 percent, or 3.38 points, to 2,219.95. Shenzhen rose 0.72 percent, or 8.4 points, to 1,172.76.

Traders also said an overnight recovery in US stocks failed to follow through in Asia.

In the United States, the Dow Jones Industrial Average rose 0.46 percent, the S&P 500 rose 0.72 percent, and the Nasdaq Composite Index advanced 0.72 percent by the close Monday.

Bargain-hunting

Peter Cardillo, chief market economist at Rockwell Global Capital, said traders were bargain-hunting after sharp losses at the end of July.

Last week, the Dow shed its gains for the year in its worst week since January, and the S&P 500 recorded its biggest weekly decline since mid-2012.

Investors are also looking to see if the Dow’s dip was an anomaly, as well as to forthcoming data on factory orders, the trade deficit and jobless claims, which are out later this week.

In currency markets, the euro stayed weak against the dollar in Asia on Tuesday as investors awaited eurozone data and a monthly policy meeting of the European Central Bank (ECB).

The euro bought $1.3420 in Tokyo afternoon trade against $1.3421 in New York late Monday, while buying 137.61 yen against 137.64 yen in US trade.

The dollar slipped to 102.49 yen in Tokyo afternoon trade from 102.56 yen in US trade Monday.

On oil markets, the US benchmark West Texas Intermediate (WTI) for September delivery rose 10 cents to $98.39, while Brent crude for September gained 15 cents to $105.56 in afternoon trade.

Gold fetched $1,292.10 an ounce by 1050 GMT compared with $1,292.80 late Monday.

In other markets:

— Bangkok rose 0.63 percent, or 9.60 points, to 1,528.98.

Telecoms company True Corporation soared 8.16 percent to 10.60 baht, while hospitality firm Minor International gained 4.76 percent to 33.00 baht.

— Jakarta ended down 0.20 percent, or 10.16 points, at 5,109.09.

Tin miner Timah gained 2.14 percent to 1,430 rupiah, while palm oil firm Wilmar Cahaya Indonesia fell 9.72 percent to 2,275 rupiah.

— Kuala Lumpur shed 0.43 percent, or 8.02 points, to close at 1,863.34.

Malaysia Airlines System gained 2.17 percent to close at 0.24 ringgit, Cycle & Carriage Bintang shed 2.53 percent to end lower at 2.31 ringgit, and Sime Darby closed 0.52 percent lower on 9.51 ringgit.

— Mumbai advanced 0.72 percent, or 184.85 points, to end at 25,908.01.

HDIL climbed 8.63 percent to 100.05 rupees, while Cummins India rose 6.52 percent to 669.15 rupees.

— Singapore rose 0.28 percent, or 9.27 points, to 3,327.67.

United Overseas Bank was down 0.61 percent to Sg$22.80 while oil rig maker Keppel Corp. gained 0.83 percent to Sg$10.89.

— Taipei shed 2.02 percent, or 188.75 points, to 9,141.44.

Taiwan Semiconductor Manufacturing Co. lost 3.24 percent to Tw$119.5, while Hon Hai Precision was off 3.32 percent to Tw$102.0.

— Manila lost 24.37 points, or 0.35 percent, to close at 6,974.

— Wellington was up 0.26 percent, or 13.48 points, at 5,104.16.

Air New Zealand rose 2.40 percent at NZ$1.92 and Fletcher Building was flat at NZ$8.82.–With a report from Dow Jones Newswires