PAMELA SAMPSON
AP Business writer= BANGKOK (AP) — Asian stock markets took a beating Monday as another setback for the U.S. economic recovery sent investors fleeing.
Weak U.S. hiring in May pushed Wall Street indexes to their biggest declines of the year on Friday. The Dow Jones industrial average fell 275 points, its biggest one-day decline since November.
The dismal report came on the heels of other data that showed weak economic conditions in Europe and Asia. Unemployment in the 17 countries that use the euro currency stayed at a record-high 11 percent in April.
There were signs that growth in China, which helped sustain the global economy through the 2008-2009 recession, is slowing significantly. China's manufacturing weakened in May, according to surveys released Friday.
Japan's Nikkei 224 index dropped 1.9 percent to 8,277.56 and Hong Kong's Hang Seng tumbled 2.4 percent to 18,119.01.
South Korea's Kospi shed 2.9 percent to 1,781.99. Key indexes in mainland China and Singapore fell, while benchmarks in Taiwan and Indonesia were down more than 3 percent.
"US jobs numbers were not the only weak reading as manufacturing output data in China and the US were also lower, and euro area unemployment reached a record level," Stan Shamu of IG Markets in Melbourne, said in an email.
"There aren't many positives for risk assets at the moment," he said.
American employers added just 69,000 jobs in May, the fewest in a year, and the unemployment rate increased to 8.2 percent from 8.1 percent. Economists had forecast a gain of 158,000 jobs.
The report, considered the most important economic indicator each month, also said that hiring in March and April was considerably weaker than originally thought.
But the bleak outlook was balanced by what some analysts said was a sell-off that could result in good bargains for oversold stocks.
"I think it's good in terms of trading, because when there is some panic selling, then the selling pressure will be released and the short-term bottom will be there, suggesting a technical rebound," said Linus Yip, strategist at First Shanghai Securities in Hong Kong.
Falling prices for industrial metals like copper and aluminum, which are widely used in construction and manufacturing, hurt mining and resource shares. Anglo-Australian mining giant Rio Tinto Ltd. fell 4.2 percent. Hong Kong-listed Jiangxi Copper Co. lost 3.4 percent. Energy Resources of Australia plummeted 8.8 percent.
Heavy industrial shares also faltered. Japan's Nishimatsu Construction Co. plunged 8.3 percent and Australia's BlueScope Steel Ltd. sank 7.8 percent.
Japanese vehicle makers were battered. Toyota Motor Corp. and Mitsubishi Motors Corp. both fell 4 percent. Honda Motor Corp. lost 4.1 percent and Nissan Motor Co. dived 4.2 percent.
Sony Corp., which fell below 1,000 yen for the first time since August 1980 on Monday, briefly touching 990 yen. Sony, which has struggled to turn around its money-losing TV business, last month reported a record annual loss of 457 billion yen ($5.7 billion) for its fourth straight year of red ink.
On Friday, the Dow closed down 2.2 percent at 12,118.57. The Standard & Poor's 500 index fell 2.5 percent to 1,278.04. The Nasdaq dropped 2.8 percent to 2,747.48.
The Nasdaq composite index has dropped more than 10 percent since its 2012 peak — what traders call a market correction. The S&P 500 is just a point above correction territory.
Benchmark oil for July delivery was down $1.17 to $82.06 per barrel, the lowest since October, in electronic trading on the New York Mercantile Exchange. The contract fell $3.30 to settle at $83.23 in New York on Friday.
In currency trading, the euro fell to $1.2401 from $1.2424 late Friday in New York. The dollar rose to 78.16 yen from 78.08 yen.
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Tokyo stocks hit 28-yr low as investors flee - YAHOO!
LONDON (Reuters) - European shares joined a global sell-off in riskier assets on Monday after disappointing May economic data from the United States and China overwhelmed any positive impact from hopes the world's central banks would ease policy further.
The euro slid 0.3 percent to $1.2400, moving closer to the $1.2288 it hit on Friday, its lowest level since July 2010, while Brent crude oil fell below $97 a barrel to a 16-month low.
Safe haven U.S. and German government bond yields held near Friday's record lows.,
"Investors are just fleeing risk assets," said ATI Asset Management chief investment officer Simon Burge.
The latest sell-off followed disappointing U.S jobs growth figures on Friday and weak Chinese manufacturing data, which stoked fears that the problems in the euro zone are causing a worldwide slowdown in business activity.
Those fears caused sharp falls across Asian markets on Monday, dragging Tokyo's Topix index to a 28-year low, and followed a fall of more than 2 percent in U.S. stocks on Friday. The MSCI world equity index was down 0.5 percent at 290.58 points.
UK markets were closed for a holiday on Monday, though the FTSE Eurofirst index of top European shares opened down 0.7 percent at 2054.97 points after hitting a six-month low on Friday.
Emerging Stocks Drop to 6-Month Low on China, U.S. Data - Bloomberg
Emerging-market stocks fell, dragging the benchmark index to a six-month low, after China’s non- manufacturing sector grew at a slowest pace in more than a year and the U.S. added fewer jobs than economists forecast.
Samsung Electronics Co., which gets 58 percent of its sales from the U.S. and China, led losses by technology companies. Lonking Holdings Ltd., a Chinese construction machinery maker, plunged 9 percent in Hong Kong after forecasting lower profit. Cnooc Ltd. paced declines by commodity producers as oil and copper prices sank.
The MSCI Emerging Markets Index (MXEF) fell 1.7 percent to 878.97 as of 2:34 p.m. in Hong Kong, heading for the lowest close since Nov. 25. The gauge slid 0.9 percent last week, an 11th straight week of declines, and has lost 4.1 percent this year. Hong Kong’s Hang Seng China Enterprises Index traded more than 20 percent below its peak this year after slumping 2.9 percent today. Benchmark indexes in the Philippines and Indonesia tumbled more than 3 percent.
“Elements of a perfect storm are emerging in the market, driving investors to take money off the table and raise cash,” said Paul Joseph Garcia, who helps manage about $17 billion at BPI Asset Management Inc. “Data from the U.S. and China combined with Europe’s debt crisis are feeding fears of a global slowdown.”
China’s non-manufacturing purchasing managers’ index fell to 55.2 in May from 56.1 in April, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday in Beijing. U.S. unemployment rose to 8.2 percent in May and payrolls increased less than the most-pessimistic forecast in a Bloomberg News survey of economists, Labor Department figures showed June 1. European leaders remain divided on solutions for the region’s debt crisis.
JPMorgan Chase & Co. cut China’s 2012 growth forecast to 7.7 percent from its previous estimate of 8 percent, citing increasing downside risks in the euro area.
-- Editors: Richard Frost, Allen Wan
To contact the reporter on this story: Ian Sayson in Manila at isayson@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
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