Asian stocks slip after major US sell-off

Categories: Business Updates

Date Posted: 01 Aug 2014

Asian markets ended their recent rally Friday, August 1 after the Dow posted its biggest single sell-off since February on weak eurozone data and as news of Argentina’s debt default and a rise in US jobless claims shook the market.

Traders said there was no single catalyst for the dip, and also pointed to geopolitical concerns over the situation in Gaza and Ukraine as having an effect.

Tokyo was off 0.33% by the break, Hong Kong fell 0.66%, Sydney slumped 1.2%, Shanghai edged down 0.08%, and Seoul lost 0.20%.

China’s official purchasing managers index (PMI) hit 51.7 last month, the government said Friday, up from 51.0 in June and its best showing since 53.3 in April of 2012.

Australia, Japan, South Korea, Indonesia, and India are also expected to release their PMI figures, which are a leading indicator of overall economic activity.

In the United States, The Dow Jones Industrial Average tumbled 1.88% to 16,563.30, erasing all its gains since the end of 2013.

The broad-based S&P 500 sank 2% to a 7-week low while the tech-rich Nasdaq Composite Index fell 2.09%.

The causes of the fall are diverse but a key catalyst was the failure of Argentine Economy Minister Axel Kicillof and US hedge funds to reach a deal, setting the stage for Argentina’s second default in 13 years.

The US Labor Department reported that jobless claims rose 23,000 from the previous week to 302,000. However, the 4-week moving average fell to 297,250, suggesting employment conditions are continuing to tighten.

Currency rates were moving only narrowly ahead of the US release of further key jobs data later Friday.

The dollar was at 102.78 yen in early Asian trade, compared with 102.80 yen in New York Thursday afternoon, July 31.

The euro bought $1.3386 and 137.60 yen against $1.3390 and 137.65 yen in US trade.

On oil markets, the benchmark West Texas Intermediate for September delivery fell 17 cents to $98.00 a barrel, while Brent crude for September was down 13 cents to $105.89.

Gold fetched $1,283.41 an ounce by 0240 GMT compared with $1,294.50 late Thursday. – with a report from Dow Jones Newswires / Rappler.com

 

Source: http://www.rappler.com/business/industries/64996-asian-stocks-slip-major-us-selloff

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