News

Asia stocks fall after series of disappointing data out of the US pummels the investment mood

BANGKOK – Asia stock markets extended losses Thursday after weak U.S. indicators sparked fears of a slowdown in the world’s biggest economy.

The troubling data included weak hiring by businesses, a plunge in mortgage applications and sluggish orders to U.S. factories.

Investors also continued to register their disappointment a day after Japanese Prime Minister Shinzo Abe delivered a speech to business leaders that introduced the third plank of his economic reform program. The Nikkei was down 0.5 per cent at 12,955.71.

“Abe took positive steps, but the ‘third arrow’ did not fly as reforms fell below expectations in terms of tax and investment restructuring,” Vishnu Varathan of Mizuho Corporate Bank in Singapore said in a market commentary.

The Tokyo benchmark tumbled 3.8 per cent on Wednesday following Abe’s speech.

Hong Kong’s Hang Seng fell 0.8 per cent. Australia’s S&P/ASX 200 lost 0.5 per cent to 4,810.80. Markets in South Korea were closed for a public holiday. Benchmarks in Singapore, Taiwan and mainland China also fell.

Wall Street sank Wednesday. The Dow Jones industrial average fell 1.4 per cent to 14,960.59. The Standard & Poor’s 500 slid 1.4 per cent to close at 1,608.90. The Nasdaq composite index declined 1.3 per cent to 3,401.48.

Investors were unnerved by a sharp 11.5 per cent drop in mortgage applications for last week. That was a disappointment because the rebound in housing has been one of the key factors supporting the stock market’s record-breaking rally this year.

There was also disappointing news on hiring. A measure of employment in service industries fell to the lowest level since last July. Separately, payroll provider ADP said U.S. businesses added just 135,000 jobs in May, the second straight month of weak gains.

Benchmark oil for July delivery was up 2 cents to $93.76 in electronic trading on the New York Mercantile Exchange. The contract rose 43 cents to close at $93.74 per barrel on the Nymex on Wednesday.

In currencies, the euro rose to $1.3092 from $1.3088 late Wednesday in New York. The dollar was little changed at 99.19 yen.

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