Asian shares lower after weaker US growth data
HONG KONG – Asian markets fell Wednesday, following the lead from Wall Street after revised US growth figures showed the world’s number one economy expanded slower than first thought in the third quarter.
Concerns over the eurozone debt crisis also continued to drag on sentiment, despite the International Monetary Fund (IMF) announcing a facility aimed at helping some countries protect themselves from contagion.
Adding to the downbeat mood were preliminary figures out of Beijing showing manufacturing activity in China had slowed at its fastest pace in 32 months.
Hong Kong tumbled 2.15 percent, Sydney shed 1.26 percent and Shanghai was 0.13 percent lower while Seoul dived 1.90 percent.
Tokyo was closed for a public holiday.
“Liquidity remains an issue across many markets and many countries, as volatile markets and uncertain macro-economic conditions mean that investors are once again happy to remain on the sidelines,” said Jason Hughes, head of premium client management at IG Markets.
In Washington the Commerce Department said Tuesday that the US economy grew 2.0 percent in the July-September quarter, slower than the 2.5 percent estimated a month ago. Many economists had expected the revision to be unchanged.
The softer growth rate was underpinned by a contraction in overall business investment, which shrank at an annual pace of 0.1 percent, due to an inventory rundown.
The Dow fell 0.46 percent, the Nasdaq slipped 0.07 percent and the S&P 500 lost 0.41 percent.
The weaker data add to the already bearish feeling across global markets as debt troubles in the United States and Europe lead traders to drag their money out of riskier assets.
In Europe, where Italy and Spain are in danger of following Greece into crisis, there are fears that France’s exposure to weaker economies’ sovereign debt could see it lose it top-notch AAA credit rating.
The IMF on Tuesday unveiled a plan to help countries with “relatively strong policies and fundamentals” but whose economies are endangered “during periods of heightened economic or market stress”.
It could help Italy and Spain, which have seen yields on their 10-year bonds sit dangerously close to the seven percent level that is considered unsustainable.
In early Asian trade the euro was at $1.3459 from $1.3505 late Tuesday in New York and it fetched 103.65 yen from 103.96. The dollar was at 77.01 yen from 76.98 yen.
Banking giant HSBC said Wednesday that its purchasing managers’ index (PMI) for China dropped to 48 in November compared with 51 the previous month, its sharpest drop since March 2009, caused by weak demand from the United States and Europe.
A reading above 50 indicates the sector is expanding, while a reading below 50 suggests a contraction. The final figures are due to be released next week.
On oil markets, New York’s main contract, light sweet crude for delivery in January, fell 53 cents to $97.48 a barrel.
Brent North Sea crude for January shed 26 cents to $108.77.
Gold was trading at $1,705.60 an ounce by 0300 GMT, from $1,691.60 late Tuesday. Dow Jones Newswires contributed to this story
