(RTTNews.com) - Asian stocks fell across the board on Friday, joining a global sell-off, as fresh concerns about the state of the credit markets and lingering geopolitical worries weighed on investors' risk appetite. Data showing a surprisingly strong pick up in Chinese manufacturing activity helped to cap overall losses to some extent.
A gauge of Chinese manufacturing activity rose to its highest level in more than two years in July, official data showed, indicating that the world's second-largest economy is stabilizing. The manufacturing Purchasing Managers Index rose to 51.7 compared with 51.0 in June, marking a 27-month high. The HSBC/Markit China manufacturing Purchasing Managers' Index (PMI), meanwhile, rose to 51.7 last month, up from June's 50.7 but slightly lower than the flash reading released earlier.
China's Shanghai Composite index ended a choppy session down 0.74 percent at 2,185.30 points, as investors cashed in on recent gains. Hong Kong's Hang Seng index slid 0.91 percent to finish at 24,532.43, snapping an eight-day winning streak.
Japanese shares fell to a one-week low, tracking offshore markets in the wake of weak eurozone data, the Argentina debt default and disappointing corporate earnings and outlooks from major U.S. corporations. The benchmark Nikkei average dropped 0.63 percent to 15,523.11, its lowest level since July 25. Among top losers, Kyocera Corp. fell 3.1 percent on disappointing quarterly results. Sumitomo Heavy Industries, Asahi Glass, Nippon Sheet Glass and Yahoo Japan Corp fell 3-7 percent.
Mitsui OSK Lines dropped 2.6 percent after the shipping firm revised downwards its first-half earnings outlook. Skymark Airlines Inc. plunged 10.5 percent. The country's third-largest carrier said it may go out of business should it have to pay Airbus Group NV a penalty for canceling the planned purchase of six A380 superjumbos.
SoftBank Corp fell 1.3 percent after French telecoms operator Iliad made a $15 billion cash offer to purchase a controlling stake in U.S. carrier T-Mobile. Panasonic Corp. edged down 0.2 percent. The electronics company reported higher sales and operating profit in its fiscal first quarter, but net income fell 65 percent, missing analysts' estimates. Sony Corp. soared 4.7 percent after its April-June operating profit doubled, boosted by gains in its videogames business.
In economic news, manufacturing activity in Japan expanded at a slower pace in July as output contracted, a survey by Markit Economics showed. The Markit/JMMA PMI index fell to 50.5 from 51.5 in June, indicating weakened activity though the index remained above the no-change mark of 50. Bank of Japan Governor Haruhiko Kuroda said today that the economy has been recovering moderately as a trend despite the softness induced by the consumption tax hike.
Australian shares fell sharply as investors turned cautious ahead of U.S. non-farm payrolls due tonight. It is feared that a robust July jobs report would prompt the Fed to start its rate-tightening cycle sooner than expected. The benchmark S&P/ASX 200 tumbled 1.4 percent to finish at 5,556.4, its biggest single-day loss since March 14. The big four banks fell between 1.1 percent and 1.6 percent, big miner BHP Billiton slid 0.7 percent, Rio Tinto shed 1.5 percent and smaller rival Fortescue Metals Group slumped 4.9 percent.
Oil and gas company Woodside Petroleum dropped 1.4 percent after its shareholders rejected a proposal to buy back $US2.68 billion of its shares from Royal Dutch Shell Plc. Medical device maker ResMed lost 5 percent after announcing its fourth-quarter results. Retailer Wesfarmers fell 1.6 percent and blood products maker CSL retreated 3.6 percent.
In economic releases, Australia's producer price index at the final stage of production climbed 2.3 percent in the second quarter of 2014 from a year earlier, data released by the Australian Bureau of Statistics showed - slowing from the 2.5 percent increase in the previous three months. Separately, an Australian Industry Group survey showed that the manufacturing sector has edged back into expansion for the first time in nine months in July.
Seoul shares inched lower, extending losses for a second day, as investors opted to remain on the sidelines after sharp gains earlier this week. The benchmark Kospi average slipped 0.15 percent to 2,073.10. Market heavyweight Samsung Electronics declined 3.8 percent on a brokerage downgrade. The South Korean won fell to a three-month low ahead of U.S. jobs data.
South Korea posted a merchandise trade surplus of $2.52 billion in July, remaining in the black for the 30th straight month, government data showed. Exports grew 5.7 percent year-over year to $48.42 billion, while imports climbed 5.8 percent to $45.9 billion. Separately, the latest survey from Markit Economics revealed that South Korea's manufacturing sector continued to contract in July, albeit at a slower pace.
New Zealand stocks fell, with momentum stocks taking a beating, as geopolitical worries and interest rate hike concerns spurred risk aversion. The benchmark NZX-50 index dropped 1.12 percent to 5,109.93, a two-week low. Xero paced the decliners, falling fell 4.4 percent to $24.30, while Pacific Edge, Diligent Board Members Services and A2 Milk Co lost 1-3 percent. Sky Network Television, Warehouse Group, Fletcher Building, Metlifecare and Air New Zealand fell 2-4 percent.
Gentrack Group slumped 13 percent below its IPO price after issuing a profit warning. Kathmandu Holdings rose 1.2 percent after the outdoor goods retailer said a cold snap last month in Australia and New Zealand helped generate more sales than anticipated.
Elsewhere, the benchmark indexes in India, Malaysia, Singapore and Taiwan were down between 0.4 percent and 0.9 percent. Manufacturing activity in Indonesia continued to expand at a solid pace in July as new orders and production increased, the results of a survey by Markit Economics and HSBC Bank showed. The HSBC manufacturing PMI index for Taiwan rose to 55.8 in July from 54 in June, increasing at the sharpest rate since April 2011.
U.S. stocks saw broad sell-off overnight, reflecting geopolitical worries, disappointing corporate earnings and the looming end of economic stimulus from the Federal Reserve even as data showed a rise in weekly jobless claims and slower growth in manufacturing activity in the Chicago area. The Dow tumbled 1.9 percent to a two-month low, the tech-heavy Nasdaq dropped 2.1 percent and the S&P 500 shed 2 percent to end the session at its worst level in well over a month.
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