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

  • Business
  • Tuesday, 05 Aug 2014

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, according to Dow Jones Newswires.

"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% or 154.19 points closing at 15,320.31, Sydney dropped 22.3 points, or 0.4%, to finish at 5,518.6, and Seoul shed 0.68%, or 14.16 points to end at 2,066.26.

Hong Kong closed up 0.2% or 48.18 points to 24,648.26, while Shanghai slipped 0.15%, or 3.38 points, to 2,219.95. Shenzhen rose 0.72%, 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 US, the Dow Jones Industrial Average rose 0.46%, the S&P 500 rose 0.72%, and the Nasdaq Composite Index advanced 0.72% by the close Monday.

Peter Cardillo, chief market economist at Rockwell Global Capital, said traders were engaging in "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 US$1.3420 in Tokyo afternoon trade against US$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 14 cents to US$98.43, while Brent crude for September gained 19 cents to US$105.60 in mid-morning trade.

Gold fetched US$1,292.61 an ounce by 0845 GMT compared with US$1,292.80 late Monday. – AFP 

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