Asian markets slump amid fears over global recovery


Asian stock markets fell on Friday as traders were rattled by a series of poor data out of Europe and the United States that raised concerns over the global recovery.

The dollar hovered around the mid-84 yen level as Tokyo kept up its verbal threats to step into the foreign exchange market for a second time to help exporters who are being hurt by the surging Japanese unit.

Tokyo fell 1.25 percent by the break, Hong Kong slipped 0.12 percent, Sydney shed 0.60 percent and Singapore was flat.

Investors were following a 0.72 percent loss on the Dow following the release of data showing the US jobs market was still in a bad state.

The Labor Department said the number of Americans asking for unemployment benefits rose more than expected last week, ending a four-week decline.

Claims for the week to September 18 hit 465,000, worse than most forecasts of 450,000 new claims.

There was a little good news with US home sales rising 7.6 percent in September, but the level of activity still remained depressed compared to pre-recession levels.

Earlier a manufacturing survey in Europe came in under par.

September’s eurozone purchasing managers’ index (PMI), a survey of 4,500 euro-area companies compiled by research group Markit, crashed to 53.8 points from 56.2 in August.

Any score above 50 indicates growth and the index has been in positive territory for 14 months but the latest figures marked the fastest drop since November 2008.

European concerns were compounded by data out of Ireland that showed the economy unexpectedly shrank 1.2 percent in the second quarter compared to the previous three months, leading to concerns of another recession there.

And in debt-laden Portugal, the main opposition party warned it would not approve a budget for next year proposed by the minority government unless tax hikes were removed.

Adoption of the budget is crucial for the country’s troubled economy, with Lisbon facing heavy pressure from the European Union and international investors to slash its swollen budget deficit.

The dollar stood at 84.51 yen, edging up from 84.39 Thursday in New York.

The euro was at 1.3325 dollars compared with 1.3312, and at 112.61 yen from 112.30.

The greenback has slipped from the mid-85 yen level reached last week after Tokyo stepped into the currency markets for the first time since 2004 but is well up from the 15-year lows it reached just before the intervention.

Japan’s Finance Minister Yoshihiko Noda kept up pressure on the yen’s rise, saying he would take resolute measures when necessary to stop it from gaining too quickly.

“Extreme volatility and disorderly movement harm the stability of the economy,” he said, adding Tokyo “will take determined actions when necessary”.

Kenichi Hirano, operating officer at Tachibana Securities in Tokyo, told Dow Jones Newswires: “I think there is no doubt that the government will intervene but the question now is when that timing will be.”

He added that many investors expected another intervention if the dollar looks like it would fall below 84 yen.

On oil markets New York’s main contract, light sweet crude for delivery in November, slid 32 cents to 74.86 dollars a barrel and Brent North Sea crude for November slipped 30 cents to 77.81 dollars.

Gold opened at 1,292.00-1,293.00 US dollars an ounce in Hong Kong, up from Wednesday’s closing price of 1,290.00-1,291.00. The market was closed Thursday for a public holiday.

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