Asian stocks fall further on Wall Street decline, weaker China manufacturing

BEIJING, China – Asian markets fell further Friday after overnight declines on Wall Street, weaker Chinese manufacturing data and gloomy sales forecasts by South Korean automakers.

Oil edged up to stay above $95 a barrel after suffering its biggest one-day drop in 14 months.

Major indexes closed out 2013 at or near record highs, but investors seemed reluctant to chase more gains in the new year.

China’s benchmark Shanghai Composite Index shed 1.4 per cent to 2,080.60, adding to the previous day’s 0.3 per cent loss after an HSBC Corp. survey showed manufacturing activity weakened in December. Analysts said that suggested China’s modest economic recovery might be fading.

“We expect the upcoming set of data releases to show China’s economy losing steam in December,” said UBS economist Tao Wang in a report.

Tokyo was closed for the last day of its New Year’s break.

South Korea’s Kospi gave up 1.1 per cent to 1,945.45 after Hyundai Motor Co. and Kia Motors Corp. said they expect sales growth in 2014 to be their weakest in a decade.

Hong Kong’s Hang Seng tumbled 1.7 per cent to 22,932.5. India’s Sensex shed 0.5 per cent to 20,784.4. Benchmarks in Singapore, Bangkok, Malaysia and Jakarta also declined. New Zealand bucked the trend to add 0.5 per cent to 5,129.26.

Investors looked ahead to comments later Friday by U.S. Federal Reserve Chairman Ben Barnanke for indications about the possible pace of further reductions in monetary stimulus.

On Thursday, U.S. stocks fell despite data showing healthy December manufacturing growth. Analysts said prices were bound to pull back after higher corporate profits and Fed stimulus pushed markets to record levels in 2013.

The Standard & Poor’s 500 index turned in its worst performance in three weeks, declining 0.9 per cent. The Dow Jones and the Nasdaq both slid 0.8 per cent.

In Europe, Britain’s FTSE 100 closed down 0.5 per cent on Thursday while France’s CAC-40 and Germany’s DAX both shed 1.6 per cent.

In currency markets, the U.S. dollar edged up 104.8 yen. The euro was down 0.1 per cent at $1.366.

Benchmark oil for February delivery gained 13 cents a barrel to $95.57 in electronic trading on the New York Mercantile Exchange. The contract plunged $2.98 the previous day to settle at $95.44.